is often referred to as the " new oil " due to its immense value and potential for driving economic growth, innovation and the positive impact it can have when used responsibly. however, when used irresponsibly, several negative consequences follow 1 / 5 bis - central bankers'speeches such as privacy violations, identity theft and frauds, manipulation using targeted advertisements, etc. in fact, irresponsible data usage not only poses risks to individuals, but undermines trust in the digital ecosystem and may even have financial stability and national security implications. understanding financial stability vulnerabilities 7. understanding financial stability vulnerabilities emerging from cyber perspective is critical because existing capital and liquidity prescriptions may not mitigate the effect of a cyber event the same way they mitigate financial losses. for instance, capital and liquidity can provide the financial resources to respond to a cyber incident but may not speed up the process of recovering systems or data. 8. cyber - attacks can disrupt critical financial operations within banks, rendering them unable to process transactions, access customer accounts, or execute essential functions. this disruption can result in a loss of confidence in the banking system, as customers and businesses may face difficulties in accessing their funds or conducting normal financial activities. such disruptions can lead to financial instability, especially if they affect multiple banks or are prolonged. 9. enhancements in service offerings, such as longer operating hours of payment systems and shorter clearing and settlement windows, leave the financial system with fewer service breaks in which operations can be restored after a cyber incident. uncertainty about the nature and extent of an incident may also prompt runs on counterparties, competitors, or unaffected segments of the financial entity's operations. 10. indeed, the 2021 ransomware attack on colonial pipeline, though not a financial entity, highlighted the interconnectedness of critical infrastructure systems and the potential cascading effects on various sectors, including banking. it illustrated how a cyberattack could spark a run, in this case, a run - on gas stations, amplifying the effects well beyond the original shock. 11. while there is extensive ongoing supervisory attention to entity - level cyber resilience, data gaps remain. at the entity level, there is need for consistent data on cyber incidents. at the system level, relevant data measures of digital interdependencies and the speed with which backup systems can be quickly enabled, are required. cyber security and digital financial inclusion 12. cyber risks can have

for sterilising the impact of inflows are important i would like to flag a few critical institutional factors which i think are required to be encouraged and made part of the automatic trigger mechanisms in the system. i would like to turn to these : problem recognition the meaning of being vigilant is to be able to constantly scan the horizon and recognise that a problem is brewing and take pre - emptive action before the problem becomes disruptive. the indicators could be asset values, excess credit growth, large unhedged exposures, continuing current account deficits financed by short term credit, weakly regulated entities in the system, opportunities for regulatory arbitrage, large leveraged positions, prolonged periods of liquidity excesses or shortages ; or the tendencies of entities to leverage, especially by exploiting the inter - linkages in the financial system. committee approach as part of crisis management, it is necessary to have a harmonised approach. first it is essential to have close coordination with the government. as in 1991, this was an important requirement in responding to the recent crisis. putting in place an institutional mechanism and systems that can facilitate continuous dialogue and co - ordination between those in charge of monetary policy, debt management, foreign exchange management, regulation and supervision of banking entities, supervision of non - banking entities, securities markets regulation and the like is a sine - qua - non. within each of these segments it is crucial to be in sync. we have a financial markets committee ( fmc ) in the central bank consisting of senior executives responsible for monetary policy and operations, debt management and foreign exchange reserves management. the fmc meets at least once every day in the morning and emergent meetings are also convened when there are episodes of sharp volatility in equity markets, or when any of the other markets are significantly affected. other regulatory departments including the department responsible for payment system also get involved during such times. the committee keeps in touch with the securities regulator ( sebi ), the stock exchanges especially the clearing and settlement corporation of the exchanges, the clearing corporation of india ltd. ( ccil ) and the like. we also have a crisis management group that meets whenever a crisis is anticipated or occurs. inter - regulatory co - ordination financial sector harmonisation among the securities, insurance, pension fund and bank regulators is enabled through the high level co - ordination committee on financial markets ( hlccfm ). the hlccfm is headed by the governor, rbi and meets as and when