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Internet and the banking and finance industry

The plenary session on the Internet and the banking and finance industry wasn't well attended, though it threw up some interesting notions for debate.

The role model here is the ICICI that literally has a line at their exhibition stall saying 'Put your money where your mouse is.'

ICICI Bank Systems Manger Ravi Nair explained how money transactions had caught on with their 'Infinity' programme. "Our customers are open to the idea of getting bank and account related information online.''

The issues debated were:

• The Indian mindset to do business electronically,
• Safety and protection on the Internet,
• The status of any standard and the technology behind it.

Prashant Singh of Microsoft said: "Trade and commerce have come a long way from the barter system to paper money and the credit card. Moving to the Internet would be a fundamental change for the consumer and though the technology applications are available to provide Net enabled e-banking, it will take some time.''

Indian public sector banks and their need to automate and computerise were felt sharply for any growth in this direction.

Private banks are already on their way to adopting any niche they can get in this growth curve though the percentages are negligible today.

Interstate money transactions carried out by Citibank and MasterCard are used by a small percentage of people. It will be some time before the convention will change.

While the panel seemed optimistic of Internet enabled banking, Pavan Duggal, Supreme Court advocate, strongly felt that "we have no legal framework in India today that will allow online banking. In fact, there is a general sense of apathy in this direction.''

He also urges that we must look at the Indian Internet banking system within a landscape that will be very different from what's happening in the Western banks. Madanmohan Rao, moderator of the event mentioned that a few banks in the US took liability and responsibility in case of credit card fraud cases, but then again the same need not apply here.

Duggal felt that though the arbitrary body of RBInet is brought about in many seminars as being a standard for conducting business in banks, it is up to the people to push the system. If it is made into a practice it will slowly become a habit and then laws will be framed for it.

"It's probably the same way that cable network operators perforated our economy. They were all illegal, a few still are, but seeing their need in the market, the government was forced to see them from a new perspective," he said.

Singh feels that when the Internet boom happens in banks, it will take place in multiple stages. "First the banks have to be automated and connected with their own branches, second they have to be interconnected with other banks, even outside the country, because the consumer will view them only as one big banking entity. And thirdly, all the right technical tools of encryption and authentication should be added to make it a success.''

Krishna Kumar of Satyam Computers also brought up the mention of an omnibus law that will ride over all other cyber laws. Does this exist?

Duggal says: "There is no concrete decision of having a universal legal code. The IT Taskforce has given solid recommendations but these are just gazetted, they are not promulgation (validated by the President of India) nor are they laws which are passed by the two houses of Parliament which can stand up in any court of law. Believe me, it sounds like a good idea but nothing is realised.''

ICICI generated interest even in Sabeer Bhatia, who normally does all his banking through the Wells Fargo Bank. He felt, "It is definitely an innovative start."

Some felt that the banks would have to take an initial risk in offering these benefits but they would go away as the system became more seamless.

ICICI uses the 'secure socket layering' (SSL) technology, which they apply to the browser and the Web server. With this confidentiality, integrity and authenticity are key concerns.

Singh sums up by saying that probably both banking infrastructure and the infrastructure of the industry would "develop parallely and unless both are ready for a give and take situation, Internet banking would not happen in India.''

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