regard. the unique feature of the cbs is that the concept of branch - based banking gives way to the bankbased banking treating the constituent as the customer not of a particular branch but of the bank as a whole. today, 21 public sector banks have embarked on the use of such systems and the number of cbs - enabled branches exceeds 14, 000 as against 14 banks with about 5000 cbs - branches a year ago. some of the banks are reportedly facing teething troubles in this area but i trust every effort would be made to stabilise the system to the satisfaction of all customers. i would urge that an assessment of the efficiency of functioning of cbs in all the banks be attempted to facilitate necessary improvements. the commercial banks have to address various emerging challenges including those arising from large - scale it deployment. these include the impact of cbs, more scientific risk management, better asset - liability management, ensuring effective anti money laundering measures, and the security concerns relating to implementation of it in banks. one issue, which often gets raised in any discussion on technology implementation, is the cost it entails. products such as smart cards, which may not require significant initial capital costs and which can be easily implemented for a large customer base, hold the promise for the future. let me highlight some of the critical factors, which need to be adequately addressed while dealing with it. prime amongst them is the need to ensure appropriate security and integrity of the system. security in it systems is only as effective as the weakest link and as financial intermediaries, the banks have to ensure that security features incorporated in it systems are the best of the breed. with ever - evolving information technology, the security concerns do not remain static and a system of an ongoing critical review of the efficacy of security features and measures needs to be instituted. integrity of the data processed and stored in it systems has to be ensured by the banks at all times and adequate back up, including real time replication, to the extent possible, provided for. another major requirement relates to disaster recovery management and the fail - safe business continuity plans. in today's world, customer expectations are high and ensuring uninterrupted availability of the it resources, even in the event of a rather extreme contingency, assumes significance. the banking community, therefore, needs to put in place appropriate contingency plans and test their adequacy at regular intervals. while the reserve bank is providing a common system - wide communications infrastructure, the ultimate objective should

high security levels. third, the introduction of the real time gross settlement ( rtgs ) system. it has not only resulted in compliance with the core principles for systemically important payment systems of the bank for international settlements ( bis ), basle but has also paved the way for risk - free, credit push - based fund transfers settled on a real time basis and in the central bank money. we had an occasion to compare our rtgs system with other rtgs systems for placing before our board for payment and settlement systems. it emerged that the indian rtgs system, which has the'y'topology, is considered to be the optimal choice and this topology has also been adopted by several central banks, which have implemented rtgs. our approach towards intra - day liquidity and potential gridlock resolution follow international patterns. an evaluation of the various components of the rtgs system vis - a - vis the critical evaluation parameters set by the bank for international settlements, basle indicates that we are close to the best on most of the parameters. the facility for inter - bank funds settlement through rtgs is available today across more than 23, 700 branches of banks spanning more than 500 centres in the country. while it is reassuring to note that transactions with large aggregate value are being settled through the rtgs system, with average daily settlement amounting to more than rs. 60, 000 crore, there is still scope for routing many more systemically important payments through the rtgs. for the purpose, enhancing the customer awareness at the user level would be an urgent imperative. it is essential that the rbi, banks and large players in the market make concerted efforts in this regard so as to ensure that all large - value customer payments across financial markets, which have systemic implications, flow into the rtgs, such as payments in the equity and debt markets. once the system achieves a critical mass of usage by the participants, a tipping point would be reached and it should be possible for the financial regulators to consider making the rtgs as the preferred mode for specified large - value transactions in the financial markets. fourth, creation of electronic fund transfer systems. it is not necessary that all the fund transactions are settled on a real time basis. it is, therefore, important to expand the reach of other electronic payment mechanisms for small - value customer transactions across the country. towards this end, the reserve bank implemented the electronic funds transfer ( eft ) system in the mid nineties, which was later upgraded as the special