The Hindu : Business : Mobile chip can function as multi-application smart card

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Tuesday, May 19, 2009
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Mobile chip can function as multi-application smart card

Special Correspondent

The potential of IT in extending banking services to under-served markets in rural and semi-urban areas is enormous, says RBI chief

D. Subbarao

HYDERABAD: Reserve Bank of India Governor D. Subbarao has exhorted banks and other financial institutions to take advantage of the expanded reach of the mobile communication technology for making banking services available to virtually every mobile phone user.

The mobile phone’s integrated chip can function as a multiple application smart card and this holds substantial promise as the delivery vehicle of the future as there is huge potential and an exciting opportunity. Mobile phone users belong to all strata of society, spread across metropolitan centres, towns and villages and banks can take advantage of this expanded reach of telecom if they provide services through this medium.

“The ability of the banks to harness new technologies to meet the demands of households and businesses will be tested. The potential of IT in extending banking services to under-served markets in rural and semi-urban areas is enormous,” he said. The RBI Governor was participating as chief guest at a meeting organised by the Institute for Development and Research in Banking Technology for presenting Banking Technology Excellence Awards 2008 here on Monday. The RBI Governor, who explained the advances in the technology sector and the way banks lapped up the emerging technologies, said use of smart card technology, mobile ATMs, coverage of post offices under electronic payment networks in out-of-reach areas all could play significant roles in providing financial services to more people and thereby serve financial inclusion. “A variety of options are available which enable extended reach of services and the banks should identify the technological model that is right for them,” he said.

Recalling the initial days of IT implementation in RBI when “systems had to be smuggled into the office when the world was sleeping,” he said new technologies set off process of change which, in turn, posed its own set of challenges to institutions as well as customers.

Security in an IT-based transaction-processing environment was equally critical necessitating the need for adequate controls. There was also the “human element” as studies across the world showed that a significant proportion of IT frauds were the work of insiders. In addition, banks should also pass on the benefits of lower costs from technology-based products and services to their customers, he added. IDRBT Director B. Sambamurthy welcomed the participants.

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