consumer trust. by imposing charges not commensurate with the cost of services provided, we risk losing this fundamental trust that underlies a banking relationship. no doubt deployment of it offers ample rewards. but these rewards can be claimed only by organizations which successfully address the alignment challenge. alignment of it and business, alignment of it and hr and alignment of it and organizational structure. these are all critical to derive true value. working in silos deprives several benefits. all this should culminate in it governance as an important component of corporate governance. security in an it - based transaction processing environment is also critical. adequate security controls must be in place. this includes the validation of transactions using the makerchecker concept, transmission of electronic messages over a network in encrypted form, due authentication by means of providing for digital signatures and storage of electronic records in conformity with the provisions of the it act, 2000 and amendment act 2008. there is also the human element, and this is an issue as well : studies from around the world show that a significant proportion of it frauds is the work of insiders. this underscores the need for ensuring that proper controls are in place and that they work properly. another serious challenge, particularly for public sector banks, is capacity building and talent retention. the success of it implementation is ultimately manifested at the counters of the bank or at the atms and not in the data centres. if it implementation in the early stages faced challenges from the trade unions today banks face different kinds of challenges. if a customer is turned back on the last day of tax payment ( any facility will not change this habit! ) or a cheque gets returned because cbs can not be accessed at the branch, the entire edifice of efficiency collapses in the eyes of the common man! banks must make sure to avoid such interfaces which erode trust and confidence. conclusion let me now conclude. we know that investments in newer technologies must be made to modernize existing operations, to face competitive challenges, and to meet customer expectations. some of these investments will also be made with the goal of achieving cost savings, energy efficiency and environmental friendliness. in the years ahead, the ability of banks to harness new technologies to meet the demands of households and businesses will be tested. i am confident that banks and other financial institutions will meet these challenges head on, continue to find new and better ways to put technology to their and their customers ’ best use, and that they will manage

and caters interoperability as the core service to the community. the retail payments in the next 3 – 5 years are likely to be driven essentially through mobile payments. this is to ride on over 1 billion mobile connections in the country and the financial inclusion drive. 7. in order to participate in the ensuing payment revolution and to take advantage thereof, we need to be taking certain strategic actions. these are as follows : a ) expanding the acceptance ecosystem : the proliferation of digital channels is evident mostly in the tier i & tier ii centres of the country. in order to promote digital channels, it is incumbent on the ecosystem which includes the banks, network partners and others. to ensure that there is adequate availability of digital channels and enablers such as debit cards, internet banking registrations, etc. in tier iii to tier vi centres as well. it is of critical importance that the population in over 6 lakh villages in the country is exposed to the alternate delivery channels. some estimates indicate that to reach the average levels of bric countries, india will need 20 million pos terminals as against the current 1. 2 million. this is a tall order. b ) government initiatives : there have been attempts to move the government direct benefit transfers onto electronic channels. i believe that with over 946 million aadhaar numbers having been issued, electronic benefit transfer is a clear strategy to promote efficient payment systems. c ) interoperability : interoperability of the digital channels as i mentioned earlier is a key driver to promote digital channels. the digital channels by definition should be available anywhere & anytime. d ) simplicity and standardization : end customers need to have simple ways of accessing the digital channels. this can be brought about through seamless processes driven by the ecosystem partners. and for this, standardization of the processes, right from registration to delivery and post delivery services is an imperative. e ) security : no electronic payment mechanism can undermine the role of security and risk mitigation in promoting digital channels. there has to be continuous and concerted efforts to ensure that the digital channels are safe & secure. the confidence of customers shall be a key to deepening the usage of digital channels. 8. with these steps, and in association with the key stakeholders like the reserve bank, the government, the banks, the payment system participants and the catalysts like npci, the reserve bank is quite sanguine that india will reap the advantages of the payment revolution. 9. i wish npci and