banks encouraging customers to move more and more towards electronic modes of payments, it is necessary to realize that however robust and secure the systems deployed may be, it is the customers ’ perception that matters in the end. bis central bankers ’ speeches it may not be out of place to mention that the reserve bank of india recently commissioned a survey of the customer service obtaining at various atms across the country. while the overall satisfaction with the usage at atm at the national level was found to be at 7. 8 on a scale of 1 - 10, it was well below the national average in states like uttar pradesh, gujarat and chandigarh. however, the survey revealed scope for improvement in the grievance redressal mechanism. over two third of the respondents revealed that they had noticed the help - line number at the atms. over 52 % of the respondents reported that complaint resolution took about two weeks or more. but what is disquieting is that the response of banks about their inability to offer a proper solution to the grievance in over 43 % of the cases was “ they are following rbi guidelines ”. i think it is necessary for the customer relations personnel are adequately trained to guide customers with greater clarity. while the focus of the conference is on secure banking, it is not adequate to ensure that all banking transactions are duly authorized and customer interests protected. it is important for banks to realize that they have a vital role and responsibility to ensure that appropriate risk management measures are in place particularly to address issues relating to money laundering and terrorist funding. i recall that an year or so back, we found on enquiry that about 3 - 4 cards issued overseas were used extensively in the atms of one bank resulting in cash withdrawal of over rs. 2. 00 crore in a short span of three months. obviously, whoever used the card was not a tourist on a shopping spree! when the matter was brought to the notice of the bank, they conceded that with reasonable risk mitigation measures, the transactions could have been identified and remedial action initiated. in this regard, we at rbi also noticed that a bank overseas was offering prepaid cards which could be delivered in india by courier. while we had no idea about the kyc aspects overseas, these cards could be used at any atm in india to withdraw cash. the implications of such a system to our country are not hard to imagine. while rbi stepped in to halt the use of these cards in india, it

is important for banks to be vigilant against similar events and alert the appropriate authorities if necessary. another area of concern that has emerged relates to fraudsters soliciting information by directing unsuspecting customers to a website purported to be that of an authentic institution, through a link in the email. this has also happened when mails were received by members of the public that a huge amount was received in their name and held with the reserve bank of india. they were provided with a link which masqueraded as rbi website and inviting them to provide their bank account details. while rbi has cautioned the public through advertisements in the media, banks also need to be watchful. but an important question that begs an answer here is that in many of these cases money has been paid by the unsuspecting public into bank accounts from where the funds have been withdrawn. how did these accounts get opened in the first place? are banks lax in observing kyc requirements? is monitoring getting increasingly lackadaisical once the machines have taken over the work hitherto done manually? another challenge faced by the industry is handling of systems, data and processes by third party vendors, which is a necessity today, and the need to have effective control over the actions of these vendors / service providers. this is in addition to the internal threats as often computer criminals are employees of the same organization. so, while still aware of outside threats, banks have a new threat, inside violations concerning data at rest. today ’ s employees are able to easily export sensitive files and information via email, ftp or by copying data to portable media. banks have to control over where their sensitive information is, how it is used, and who obtains it. ( e. g customer data being compromised at citi account online, hyundai capital and sony ) banking industry has been conscious of the challenges to security and appreciable efforts are being made by all the stakeholders in the context, viz. governments, regulators, banks and technology providers. as you know, a working group was constituted by rbi under the chairmanship of shri. g. gopalakrishna, ed, rbi on information security, electronic banking, technology risk management and cyber frauds which provides detailed bis central bankers ’ speeches suggestions in areas relating to it governance, information security, it operations, information system audit, cyber frauds, business continuity planning, customer education and legal issues arising out of use of it. the group has given recommendations that need