'Banks should  invest adequately in IT infra in line with business growth to cut outages': RBI Governor

The Reserve Bank of India on Friday said that the banks should invest adequately in IT infrastructure as per its business growth and volume to cut outages. 

Speaking at the press conference after the RBI MPC meeting, RBI Governor Shaktikanta Das said: "Whenever there are any outages, the problem is not at the end of NPCI or UPI... it is the banks where the problem shows up. There are many reasons for it, which we are dealing with."

He added: "The RBI does not prescribe minimum investment but banks should invest adequately in IT infra in line with biz growth to cut outages."

It is to be noted that RBI barred Kotak Mahindra Bank from onboarding new customers through its online and mobile banking channels and issuing fresh credit cards, citing supervisory concerns over its technology platforms.

RBI imposed the restrictions on the bank to “prevent any possible prolonged outage" that could “seriously impact not only the bank’s ability to render efficient customer service but also the financial ecosystem of digital banking and payment systems". 

Recently, ICICI Bank declared that that it had significantly increased its spending on information technology and cybersecurity, from 5.6% of aggregate operating expenses in 2019 to 9.4% in financial year 2023-24. ICICI Bank too had faced a number of incidents of outages in the past.

After declaring its Q4 results, Sandeep Batra, executive director at ICICI Bank, said: “IT resilience and customer security are of paramount importance to us and this is not constrained by any budget." 

“This is an ongoing effort and there could be instances of outages and errors in any bank. We have the ability to take quick recovery and corrective action and we will remain focussed on improving our capabilities," he added. “Whenever we need to spend money that has never been a constraint, we will remain focussed," he added.