Wednesday, January 6, 2010

PSU banks working hard to achieve 100% CBS by June 2010

The CEO’s of banks have decided to achieve 100% CBS by June 2010. In view of this the government-owned banks are working hard to get centralized banking software which will make possible for the customers to access their accounts from anywhere through a variety of channels. Moreover banks have to get networked so that they can facilitate the government’s unique identification project where banks will work as sub-registrar.

Through centralized banking software, banking industry term it as a core banking solution, the information of accountholder is transferred through computers in bank branches to a central server.

A CEO of a large commercial bank told ET, in a recent meeting held between the CEO of large commercial banks held meeting with RBI deputy governor Usha Thorat on financial inclusion, in the meeting banks had informally decided that they will try to achieve 100% CBS by June 2010. The aim of financial inclusion is to make possible for every family to access banking services from any where and to achieve this RBI’s key component is the unique ID project. This unique ID will help banks in identifying Indians barred from carrying out banking services and will give them an identification to acquire a bank account.

Nandan Nilekani, chairman of Unique Identification Authority of India (UIDAI), has been given UID project, has clearly told that the banks should inter-connect their branches to operate as sub-registrar. After the implementation of the UID project individuals can get UID number from a sub-registrar. For the registration of individuals the banks will be provided software by UIDAI. To operate as sub-registrar banks need to have CBS.

According to bankers if individual get registered through them for the UID, then they will offer support in an attempt towards financial inclusion, especially in rural India. Under financial inclusion rural people will be provided banking services at affordable costs to the weaker sections of the society.

Sometimes it is difficult for people living in slums and rural India to open bank accounts as per KYC norms identity proof like proof of address and electricity bills are required. Thus with UID number individual will be open a bank account quickly.

Till now, RBI has not marked any deadline for the banks to achieve 100% CBS. But the regional rural banks (RRBs), have been given a deadline, which is September 2011. Large commercial banks as State Bank of India and all its associate banks have achieved 100% CBS and other banks to achieve are Punjab National Bank, Bank of India, Bank of Baroda, Union Bank of India, Corporation Bank, Andhra Bank, Oriental Bank of Commerce and Indian Bank. However Canara Bank and Central Bank of India are among the big banks who have to still achieve 100% CBS.

The officials of both the banks have informed ET that will probably achieve 100% CBS before June. Along with anytime-anywhere banking they will provide facilities like instantaneous transfer of funds across accounts and allow PSU banks to extend their customers the same facilities that are provided by new generation private banks.

Also banks are planning to tie up with telecom companies for financial inclusion project. Around 10 Telecom Company and CEOs of large commercial banks will be meeting Mr Nilekani in New Delhi on January 6. In the meeting they are likely to discuss about the role of each of them can play for India to fully comply with financial inclusion.

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