liability to the customer. let me now turn to the issue of technology and cost. before i speak my mind on the issue, let me make it very clear that rbi does not support the argument that cash transactions in this country will disappear rapidly or that all paper based transactions would turn electronic if the financial sector was to offer electronic transactions free of cost. in fact, we firmly believe that anything that is offered free of charge can never be scaled up and that it cannot become bis central bankers ’ speeches robust and efficient unless it offers commercial viability to those who offer the product / service. having said that, i also do not support the principle, ostensibly being followed by some of the institutions, to recover a large part of technology expenses from the customers. i was amused at the action of banks deciding to waive charges on “ inter - core ” transactions hitting headlines in the media. it should have never happened in the first place. in fact, such charges, rather than their removal, should have hogged the limelight. further, in an electronic banking scenario, ad valorem charge to customers is an issue which needs to be relooked. in fact, in a country like ours, part of the cost efficiencies achieved through technology must be passed on to the smaller customers. this calls for a rejig in the way in which banks approach technology. in a technology led financial sector, collaboration among all stakeholders, including competitors, could prove to be the big cost saver. with rapid strides in security standards and capabilities, such a collaboration and sharing of it infrastructure is feasible on a much larger scale than is happening today. it is always perceived by the industry that the handholding / intervening by rbi is necessary for the systems to be operational in an efficient manner. i am unable to understand why collaborative approach cannot be the guiding force for success in adoption of shared it infrastructure. reserve bank has contributed to the fostering of innovative methods to improve access to financial services through mobile and opened up and clarified the issue of business correspondent ( bc ) interoperability. leveraging technology for making financial inclusion possible and a success prior to the enablement of bc interoperability, the banks and technology providers had made a case that it was the lack of interoperability, that was a deterrent for financial inclusion and hence, much headway had not been achieved. according to the technology providers, investment in a non - interoperable technology would be a costly proposition and they did not see

across the banking system. one core banking system of a bank is so different from another that a customer changing a bank will have to de - learn and re - learn banking operations all over again. coming to ( b ), the attention paid by the banks to database migration has been so casual that the full benefits of computerization and technology are yet to be reaped. is it not an irony for the banks to claim that npa levels in a particular period went up as they moved over to “ system generated ” npa computation? as far as the customer is concerned, the systems fail at the most inappropriate time. let us go back to atms. even today, we continue to receive a large number of complaints on account of malfunctioning of atms. is the incubation period for the atms installed by banks not yet over? should the system continue to run based on fear of penalties for inefficient customer service? or would white label atms, for which rbi has recently issued exhaustive guidelines, provide encouraging solutions to these issues? technology and consumer protection one developing concern is the increasing number of frauds in our electronic banking payment scenario. as the banking and payment space becomes increasingly ubiquitous, the challenge is to maintain the quality of security at the highest level in the financial sector. in the recent survey conducted by the bank for international settlements, 55 % of the financial market infrastructures surveyed indicated that cyber attacks are increasing on account of phishing, weaker credentials / passwords, trusted insiders, denial of service attacks, etc. technology should result in reduction in risk, not otherwise. this situation warrants huge investments in it security and i would urge the banks and the it companies to work together in this regard. another angle to this issue is the protection that a customer has to be assured in the electronic banking scenario. the reserve bank expects banks to put in place checks and balances that provide confidence and protection to a genuine customer against frauds. otherwise, the credibility of the entire system will come under scrutiny. the customer should be afforded the same kind of protection in an electronic transaction that he now gets in a paper - based transaction. the customer is not held liable if a signature is forged, whereas he is held responsible when a fraudulent transaction takes place electronically and the onus rests on the customer to prove that it was so. is this fair? will such a scenario encourage electronic transactions? we need to find a solution which provides a near zero