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|September 1, 1997||
Reserve Bank to use VSAT with Hyderabad as hubThe Reserve Bank of India is to soon introduce a 'very small aperture terminal' or VSAT based communication system with Hyderabad as the 'hub' for quicker exchange of information in the banking industry, RBI Governor C Rangarajan announced on Saturday.
Inaugurating the 'electronic data capture equipment' project of the Andhra Bank, the first such system by a public-sector bank in the country, Dr Rangarajan said the 'VSAT' communication system would facilitate quicker dissemination of information not only to the banks in the country but from those outside, apparently relating to the foreign exchange rates and credit interests.
Claiming that the greatest impact of computer and communication technology has been felt in the service sector, particularly in the banking industry, Dr Rangarajan suggested that all bank branches be computerised and interconnected for providing better customer service and for faster reconciliation. Dr Rangarajan headed the Bank Computerisation Expert Committee in 1982.
He reminded the public-sector banking industry that its competition would be not only on the liability side but also on the assets side. Even non-banking institutions and scheduled banks could pose serious competition even as customers have become more demanding and need to be served better.
He praised Andhra Bank for improving its profitability and said that this indicated a combination of social banking with viable banking.
Referring to Andhra Bank's full computerisation of 30 branches and partial wiring of another 89 branches, the RBI governor said computerisation in the banking industry has still a long way to go.
However, computerisation at the branch level, which is the public interface, should be followed by interconnectivity, Dr Rangarajan pointed out.
Earlier, Andhra Bank Chairman and Managing Director G Narayanan said his was the first public-sector bank in the country to introduce the credit card transaction automation project.
The EDC system, he said, would considerably reduce the waiting period for cardholders and merchants for completing their transactions. It would also enable the bank to realise transaction amounts from card issuing banks anywhere in the world on the same day, especially with over 50 per cent of the transactions being on international cards.
The system, he said, would not only mean speedy inflow of foreign exchange into the country while the bank gained in terms of saving on the float cost as a result of quick recycling of funds and the incentives in the form of lower interchange fees, which makes the project cost recoverable within a year.
The project, he said, is being implemented in the first phase to cover four metropolitan cities of Hyderabad, Bangalore, Jaipur and Goa by networking card centres which are in turn connected to the merchants. Other cities would be connected in a phased manner.
The bank, he said is also considering introduction of 'smart cards' as a new payment instruments of its programme of developing electronic banking. It has already introduced photo cards as a part of a fraud-proof system, he added.
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