Approach Paper on Automated Data Flow from Banks – An Introduction.

RBI releases Approach Paper on Automated Data Flow from Banks

Today RBI has released an Approach Paper on Automated Data Flow from Banks to itself.

The complete Approach Paper can be accessed @ http://rbidocs.rbi.org.in/rdocs/content/PDFs/APSDS101110.pdf

What is meant by Automated Data Flow?

– – It is a straight-through-process in which the Data from the core banking solution (CBS) or other IT systems of commercial banks flow to the Reserve Bank of India’s Data Warehouse.

The basic question is why the Data flow from Banks to RBI should be automated. There are two main reasons. One is to ensure consistency of Data from the Banks, so that a meaningful comparison is possible amongst peers.

The other is to reduce errors, and delays in submission of Data by the Banks.

The genesis of this Approach paper:-

01) Online Return Filing System (ORFS), was launched by RBI in 2008 @ http://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=18963

02) To overcome the inefficiencies in ORFS, ‘Automated Data Flow’, route was thought off. This was first mooted in the in the Monetary Policy Statement of April 2010 @ http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=5602&Mode=0

03) A Core Group consisting of experts from banks, the Reserve Bank, the Institute for Development and Research in Banking Technology (IDRBT) and the Indian Banks Association (IBA) has been constituted for preparing an approach paper on automated data flow (a straight through process) from the core banking solution (CBS) or other IT systems of commercial banks to the Reserve Bank.

04) In April, 2010, RBI, DIT floated a tender for appointment of a Consultant for preparing a detailed approach paper for Automated Data Flow from Banks to RBI @ http://www.rbi.org.in/Scripts/BS_ViewTenders.aspx?Id=796

05) The Core Group submitted the Approach Paper to RBI, and the same has released today i.e 11/11/2010.

06) The paper, inter alia, discusses the methodology to be adopted by banks to classify themselves into a cluster based on its technology and process dimensions. Based on this, estimated timelines for achieving complete automation of submission of returns have also been furnished.

07) The approach suggested for banks will be implemented in two phases.

A) In the first phase, banks would be required to ensure seamless flow of data from their transaction server to their management information system (MIS) server and generate all returns from the MIS server automatically, without any manual intervention. Banks in turn would push the Data from their MIS Server to RBI Data Warehouse.

B) In the second phase, the Reserve Bank would introduce a pull mechanism for the flow of data from the MIS server of banks in a straight through process. The timeline of the entire project will be determined in consultation with banks.

Once the Banks reach the Common End-State, the project would have achieved its objective.

Common End-State; i.e. the stage to be reached by the banks to achieve complete automation of data flow.