Regional rural banks (RRBs) may need more time to shift entirely to core banking solutions (CBS) than that allotted by the regulator. The deadline to adopt core banking solution is set to expire at the end of September.
Reserve Bank of India (RBI) Deputy Governor H R Khan on Thursday said RRBs would take another two-three months to adopt CBS. On being asked whether more time would be provided, he said, “I think they would achieve it in two-three months...If there is a need, an extension may be given,” he said on the sidelines of an event.
A senior public sector banker said RRBs should be given more time to enable the penetration of technology. “Commercial banks have moved to the system just recently. So, smaller banks should be given more time,” he said.
On Wednesday, National Bank for Agriculture and Rural Development Chairman Prakash Bakshi had said regional rural banks should implement core banking solutions by December. Another public sector banker said power and connectivity were the biggest challenges banks face in covering all branches in rural areas. “We already have-in house technology installed in all branches, only connectivity needs to be looked at,” he said.
The adaptation of agricultural lending products was a primary reason for moving to CBS. “Agri loans and other financial products are different and this system needs to adapt them,” said the general manager of a large public sector bank.
Bankers have said investment was not a problem, though implementation may take some time for branches in rural areas.
