rs. 1 crore to rs. 1. 5 crore and rs. 20 – 40 lakhs respectively, the need for a proper business case cannot be over - emphasised. suffice to say, if the volume of transactions is very low, the per transaction cost especially in rtgs would be very high, rendering the whole proposition uneconomical and unviable to the entity and to its customers as well. given this, smaller banks could explore options such as indirect participation. illustratively, rrbs have been permitted to participate in neft through the sponsor bank route. is there a need to extend the contours of this policy to urban co - operative banks is something the reserve bank will examine. payment processing capabilities – the evolving challenges given the emphasis of the government and the banking industry to extend financial services to all segments of indian society, the usage of electronic payment products is bound to increase. there is a discernible move in this direction as seen by the rise in the total value of cashless payments as a percentage of gdp registering an increase from 13. 9 percent in 2008 – 09 to 14. 3 percent in 2009 – 10. this rise in volumes in electronic payment systems is primarily stemming from that segment of population that has a bank account. but, given the continued emphasis on shifting cash transactions to non - cash modes ; ongoing financial inclusion initiatives ( 64 million new accounts opened ) and the efforts of the government to transfer all social benefits electronically to the citizens, the volume of transactions in the electronic payment systems would grow manifold. the enormity of the numbers that we are looking at can be gauged if the present subsidy schemes of the government are brought into electronic payment modes. from the data available with us, the present government subsidies amounting to rs. 2. 97 lakhs crore would alone translate into approximately 3810 million transactions per year. this would in turn add 12 to15 million transactions to the payment systems over and above the transactions already being processed on a daily basis. rbi is seized of this challenge and is already contemplating measures to strengthen the payment system infrastructure at the processing sites. however, this alone would not be sufficient unless and otherwise banks are in readiness to handle the increased volume of transactions. banks could argue that a good percentage of such transactions could be intrabank would not be part of inter - bank payment systems. however, irrespective of the nature of transactions such transactions would ultimately hit the core banking solution ( cbs )

banking services. the codes and rrbs 15. all banks offer the same products with variants but what distinguishes and sets apart and gives the competitive edge to a bank is the quality of customer service extended by the bank. 16. the codes are the rrbs mandate, adopted by rrbs with the specific approval of the board of directors. rrbs must take full ownership of these codes and facilitate their adoption ensuring complete adherence. 17. rrbs have undergone a sea change. they are now almost treated on par with other commercial banks. the customers of the rrbs are illiterate and poor ; there is also an asymmetry of information. hence the adoption of standards of behaviour and codes of conduct framed by bcsbi for dealing with customers is an imperative. 18. at one point we are all customers of banks. what are the ingredients of treating customers fairly? transparency, proper disclosure, non - discriminatory and non - exploitative pricing, building a robust and responsive grievance redressal mechanism within the bank and also making the customer aware of redressal available through the banking ombudsman scheme. transparency does not mean bombarding the illiterate customer with humungous bis central bankers ’ speeches amount of information which she is neither able to understand or use. it merely means no hidden charges. the customer must up front understand what she is letting herself in for ; the terms and conditions of the contract should be clearly understood. 19. the codes need to be clearly understood and fairly implemented by regional rural banks. banks are commercial establishments. they are not philanthropic organizations. however, they enjoy great leverage and an oligopolistic position simply as the borrower in the rural areas may lack choice which his urban counterpart enjoys. this casts a much greater responsibility upon the rrbs. knowledge and general awareness about the codes of the bcsbi needs to be increased. just this morning, mr mahajan shared with me that despite valiant attempts knowledge of and appreciation of the bcsbi codes was spreading very slowly and this was a cause of concern. the chairmen of the rrbs must appreciate that the poor borrower who comes to the door step of the bank is highly unlikely to meet the chairman of the bank. for him the frontline manager is the bank. the frontline manager needs to be sensitized to the importance of the code of bank ’ s commitment to customers. he must understand and believe in them. this affirmation will then translate to increased