Finance Ministry asks PSBs to review their IT disaster preparedness | Finance News

The Union Finance Ministry (FinMin) has instructed public-sector banks (PSBs) to review their information technology (IT) systems, especially the disaster recovery channels, a senior government official said, requesting anonymity.

“The regulator (Reserve Bank of India) conducts its own audits regularly. We have also requested major PSBs to evaluate their disaster recovery channels, where banks maintain data in parallel,” said the senior government official.

 

In case a bank headquartered in Mumbai stores backup data in another seismic zone, if one channel stops functioning, the other will automatically activate without causing any disruptions for customers, the official said. “Implementing such a system requires significant investment,” the official said. A query sent to FinMin remained unanswered till the time of going to press.

 

Testing the disaster preparedness of various segments of the financial market has gained prominence in the recent past. On May 18, the Indian stock markets, such as BSE and NSE, conducted special trading sessions in the equity and derivative segments to evaluate their disaster preparedness in the event of major disruptions. Both exchanges underwent an intraday switch from the primary site to the disaster recovery site during this session.

Initially, the government official said, the major banks, such as State Bank of India (SBI), Bank of Baroda, and Canara Bank, had been asked to assess their disaster recovery systems. “The outcomes were positive. We will also examine other PSBs,” he added.

On May 9, SBI Chairman Dinesh Khara announced the state-run bank was in the process of recruiting approximately 12,000 individuals for various positions, including IT. Khara mentioned that these new recruits would receive initial exposure to banking operations, with the possibility of transitioning to IT and other associated roles later on.

“Around 11,000 to 12,000 employees are in the hiring process. These are general employees, but we actually have a system where at our associate level and officers’ level, around 85 per cent of them are engineers. We give them some exposure to understand banking, and thereafter, we start channeling them into various associate roles, and some of them will be channeled into IT,” Khara said.

In an interview with Business Standard earlier this month, Punjab National Bank Chief Executive Officer Atul Kumar Goel said the bank’s focus on digital and human resources transformation over the past year had strengthened the systems for cybersecurity.

SBI’s digital adaptation has surged from 84 per cent in FY23 to 89 per cent in FY24. While Canara Bank’s digital transactions surged 48.1 per cent Y-o-Y in FY24, PNB’s jumped 62 per cent Y-o-Y during the same year. Meanwhile, BoB achieved a total digital transaction rate of 94 per cent in FY24.

First Published: May 21 2024 | 11:13 PM IST