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very high degree of KYC compliance and a very robust underlying robust payment system. Therefore, there is
AML regime. Once these standards are achieved, a a need for transforming the "fit for current purpose"
unified KYC for banking system could be thought of. payment system infrastructure into a state of "ready
for future challenges" infrastructure.
e. Corporate Governance Deficit
A road map for ensuring the benefits of a structured
Several studies have highlighted the direct relationship modern payment and settlement system, including
between good governance standards and the innovative products, to reach out beyond the currently
performance and efficiency of an entity. This is all the served target groups,thereby facilitating greater
more true in respect of banks, which, in their fiduciary financial inclusion is to be prepared. This is to be
capacity deal with public money on one hand and on achieved by nurturing a payment system that
the other, enjoy government /central bank support due adequately serves the national and international
to their centrality in the overall financial system. transaction needs of the nation.
The Board of Directors and the senior management b. Structured and planned approach for further
have a great oversight responsibility in ensuring that financial inclusion
the respective banks lay down robust compliance The Reserve Bank has been furthering Financial
culture and corporate governance framework which is inclusion (FI) through a combination of strategies
reviewed periodically for its efficacy and efficiency. including relaxing regulatory guidelines and providing
new products and other supportive measures to
4. New Services achieve sustainable and scalable financial inclusion.
a. Structured and efficient payment and settlement The Reserve Bank has adopted a bank-led model for
system financial inclusion which seeks to leverage on
The growth of electronic payments has been impressive technology. A structured and planned approach was
in recent years. However, the benefits of modern followed under financial inclusion wherein all banks
electronic payment systems are not spread evenly were advised to implement Board-approved Financial
among all sections of society and across the different Inclusion Plans (FIPs). The need for technological
regions of the country. innovation in the context of financial inclusion is of high
priority.
Despite multiple electronic modes of payment being
available, cash is still the preferred and dominant mode 5. Technology
of payment in large parts of the country. Against this
backdrop, achieving the goal of a less cash economy With the explosive growth of the internet, mobile and
and inclusiveness will require infrastructure for an wireless tools, the way both the economy and business
are conducted today has been revolutionized and as
such, the technological needs of banks are not confined
to only risk management requirements. Technology has
evolved as the integrator and holds the key to the
future success of any corporate entity and more so for
the banks. Speed, accuracy and quality in operations
and delivery mechanism as also cost efficiency are some
of the known benefits that would accrue to both: banks
and their customers.
However, enhanced usage of technology also poses
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