Computerisation to help RBI better monitor NPAs: Dr.K.C.Chakrabarty

The Reserve Bank of India's Deputy Governor Dr.K.C.Chakrabarty said that once the core banking solution (CBS) was complete the central bank would be in a better position to monitor non-performing assets (NPA) of banks.  "Data coming from the origin without any manual intervention will bring the reliability and integrity of the data. RBI has detected enough discrepancies in data in the bank branches," Chakrabarty revealed. The deputy governor also suggested that increasing working hours in bank branches by dividing them into shifts would not only lessen the burden on the branches, but also help banks to bring down the cost of transactions by the maximum utilisation of technology. "When the transaction cost comes down, bank can offer more interest rate on deposits and charging less interest rate on lending. When more and more people start taking use of technology, its cost comes down," he said.  On rising frauds in banks, Chakrbarty said that there are normally 20-25 lakh transactions happening in the banking industry everyday. “If any fraud is happening at any point of time in a bank, then the bank itself is supposed to examine it. All that we are trying to see if bank has got a system in place to keep a track of these frauds. In fact, it was one of the main purposes of having the supervisory mechanism in place,.'' he said. On financial inclusion, he said, "The commercial banks will be able to achieve the financial inclusion goal by March 2012 whereas the RRBs will be able to achieve it by September this year itself. Many of them, which may include Maharashtra Grameen Bank sponsored by Bank of Maharashtra have already completed it." On increasing reliance on Rural Infrastructure Development Fund(RIDF) by the banks, Chakrbarty clarified that if the banks are not able to meet the priority sector targets, then only the RIDF comes into the picture.  “The objective of RIDF is not that banks should not achieve their priority sector lending targets and give the money to RIDF. There ways to fulfill the demands of priority sector lending,” he said.