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RBI Prods Banks to Safer Banking

Real-time status of credits/debits should be sent to depositors, said the RBI

Prodding bankers towards a more customer-friendly, even –ultra-safe, era, the Reserve Bank of India said it wants banks to tell their clients when any fund transfer has happened either by short message service (SMS) or through e-mail.

With banks increasingly adopting technology to serve an increasing number of customers on a daily basis, and with a hands-on approach being reduced constantly to enable the servicing of a huge number of transactions without undue delay, the safety of funds can be a concern area.

The chance of fraudulent withdrawal of funds becomes an ever-present threat.

To curb such instances as soon as possible, the RBI has sought to rope into the security system the very people such criminal activity will hurt – the depositors. After all who would better know when a fraud is being carried out on their accounts than those people whose account is being pilfered, goes the reasoning.

With India’s tele-density jumping manifold times over the last few years, in rural India it stands at 13 per cent, against 72 per cent in urban areas, there is a need for such services to set the mind at ease of all concerned -- for computers the total PC installed figure is 36 million units as of March 2009.

What the RBI wants is not just a few large banks to adopt this practice, but it to become a fundamental feature provided by all banks in India.

This will apply to the Real Time Gross Settlement (RTGS) system, which enables real-time transfer of funds, and is adhered to by almost all banks in the country.