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RBI working on use of smart card

Special Correspondent

The card will serve as a data repository of information relating to cardholder

— Photo: Mohammed Yousuf

FOR TECH BREAKTHROUGH: Y. V. Reddy (second from right), RBI Governor, presenting the Institute for Development and Research in Banking Technology Award 2005-06 to K. Ramakrishna, Chairman and Managing Director, Andhra Bank, in Hyderabad on Saturday.

HYDERABAD: The Reserve Bank of India is working on the use of multi-application smart-card systems, which can operate as a bank account and also function as a store of electronic cash.

Being worked in association with the Institute for Development and Research in Banking Technology (IDRBT), the smart card will work as a data repository for information relating to cardholder containing security features such as biometric identification. The card can double up as an entitlement identifier or as a social security card, RBI Governor Y. V. Reddy said.

Dr. Reddy was here on Saturday in connection with a national conference on financial inclusion and presentation of banking technology excellence instituted by the IDRBT. Recalling that the National Bank for Agriculture and Rural Development (NABARD) had already introduced a pilot project on smart cards with Sri Visakha Grameena Bank in Andhra Pradesh, he said that with enhanced use of rural-oriented technology, the bank would be able to provide value addition to services being offered to rural clients and further expand its outreach in a sustainable manner.

On the other initiatives, he said introduction of the real time gross settlement (RTGS) system had ensured the compliance of the banking system with global norms, while paving way for risk-free and credit push-based fund transfers settled on a real time basis.

On the impact of technology on markets, he said the negotiated dealing system and order matching helped in securing better price discovery, transparency in trading and other aspects. The RBI was in the process of fully integrating the NDS settlements with the RTGS.

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