banks to introduce certain minimum checks and balances to mitigate the impact of such attacks. banks have also been instructed to put in place customer induced caps on value of transactions, limit on number of beneficiaries to be added in a day, sending alerts when beneficiary is added, velocity check on number of transactions, introduction of additional factor of authentication, etc. banks have also been instructed to consider feasibility of using digital signatures for large value payments in rtgs and capture of ip address as an additional validation check. the reserve bank has mandated additional factor of authentication for all card not present ( cnp ) transactions. several measures have already been initiated to secure the card present ( cp ) transactions through implementation of recommendations of the “ working group on securing card present transactions ” ( chairperson : gowri mukherjee ) in a time bound manner. 13. it becomes the responsibility of all the stakeholders to ensure timely completion of all tasks mandated towards fool - proofing the ecosystem for electronic payments. one of the measures for securing card present transaction is implementation of ukpt ( unique key per terminal ) or dukpt ( derived unique key per transaction ) and tle ( terminal line encryption ) to secure the technology infrastructure. while most banks have implemented these measures, 100 per cent achievement is likely to materialise soon leading to a safe and secure environment for electronic payment systems in our country. 14. while it is critical that technological measures are put in place, what is equally, if not more, important is creating awareness amongst the consumers / customers using these electronic payment methods. reserve bank has initiated a series of awareness programmes – e - baat ( electronic banking awareness training ) alongwith banks and other stakeholders. at the same time, serious attention needs to be paid to related issues of consumer protection, grievance redressal mechanisms, and issues of consumer liability in case of negligence or complicity in the event of unauthorised / fraudulent transactions. challenges in indian payment systems ecology 15. there are several issues which need to be addressed to make the electronic payment system infrastructure in india more efficient and integrated ; the crucial ones being building bis central bankers ’ speeches dexterity of payment systems through standardisation, interoperability, and creation of common infrastructure. 16. in india, there are different types of messaging solutions and formats specific to each of the payment systems. consequently, banks / system participants are required to develop application specific apis ( application program interface ) to integrate with these payment systems.

harun r khan : derivatives dynamics – looking back and looking ahead keynote address by mr harun r khan, deputy governor of the reserve bank of india, at the finance conclave 2015 on “ indian derivatives markets – striking a balance between risk protection and liquidity ”, organised by the sp jain institute of management & research, mumbai, 17 january 2015. * * * the speaker acknowledges the contributions of shri himansu mohanty of the reserve bank of india. the speaker also acknowledges the inputs from shri. sudarsana sahoo of the reserve bank of india. 1. prof. sesha r. iyer, prof. suresh g lalwani, prof. ranjit pattanaik and learned panellists & invitees. i am happy to be here today on the occasion of the finance conclave 2015 on “ indian derivatives markets – striking a balance between risk protection and liquidity ” organized by the sp jain institute of management & research and share some of my thoughts on the dynamics of derivatives in the indian context. 2. “ derivatives ” have for quite some time been a totem of expertise for anyone connected with finance, be it a market practitioner or a financial economist or a financial sector regulator. part of the interest no doubt stems from the usefulness of the derivatives, but a large part of interest is actually a form of pure wonder of incomprehension owing to the complexity of its valuation, design and risk implication. be that as it may, derivatives at various times have evoked quite extreme reactions from thought leaders in the field. warren buffet is reported to have described derivatives as, “ financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal. ” similar sentiment has been echoed by george soros, while advising people to avoid derivatives, “.... because we don ’ t really understand how they work. ” at the other end of the spectrum, former federal reserve chairman alan greenspan, a steadfast defender of derivatives, said in a senate committee hearing “ what we have found over the years in the marketplace is that derivatives have been an extraordinarily useful vehicle to transfer risk from those who shouldn ’ t be taking it to those who are willing to and are capable of doing so ”. the global financial crisis ( gfc ) had spurned a large volume of literature laying much of the blame for the crisis at the door of indiscriminate use of derivatives, pointing out the dangers inherent