RBI steps up focus on cyber security of banks

A panel for IT Examination and Cyber Security initiatives of banks has been set up; IT exams were also initiated in two banks

With the rise in the use of technology for banking transaction and lenders dependence on financial technology, Reserve Bank of India has decided to sharpen its focus on cyber security of banks.

In this regard RBI has set up a panel for IT Examination and Cyber Security initiatives of banks. "Accordingly, a detailed IT examination was initiated in two banks in October and December 2015. It is proposed to roll out the IT examination in 30 major banks during 2016-17. Furthermore, it is proposed to carry out IT examination in all banks by 2017-18," said RBI's annual report.

Apart from this the regulator has also proposed to set up a Cyber Security Lab that will assist IT examiners in conducting analysis of cyber security of banks.

 

Apart from this, RBI has also set up another panel to view the 'disruptive' potential of financial technology.

"The Group will assess the opportunities and risks from Fin Tech for customers and other stakeholders. Furthermore, it will examine the implications and challenges of Fin Tech for various financial sector functions, including intermediation, clearing and payments being taken up by non-financial entities, and suggest appropriate regulatory response," said the report.

This comes at a time when there has been a surge in mobile banking and online transactions. As per the report, mobile banking service growth surged by 126.6 per cent in terms of volume and 290.3 per cent in terms of value at Rs 4,00,000 crore during the year.

With the rise in the alternate payment system RBI is also looking at review of guidelines of prepaid payment instruments that also function as mobile wallets and White Label ATMs that were set up to boost card transactions.