The Reserve Bank of India (RBI) is the central bank and monetary authority of India. It is an independent apex monetary authority and plays a vital role in monitoring and managing the financial system of the India. As a regulator and supervisor of the Indian banking system it ensures financial stability & public confidence in the banking system. It plays the critical role of macro-economic management and supports development initiatives and programs of the Central Government.
In addition to framing and managing monetary policies, the RBI lends fiduciary services to banks and Central and State Governments and executes multiple functions like issuing currency, managing foreign exchange, working as a bank of government and as banker of scheduled commercial banks, etc.
Over six decades of its existence, RBI had added many systems and applications to its IT ecosystem to meet policy and regulatory requirements and address security concerns. These systems were created for different departments by different vendors to suit different needs at different times. Most of these came into being to solve an immediate policy change request or a new policy implementation requirement. Needless to say, the platforms, hardware and software were different – more importantly, these systems were operating in silos and this posed business and technical challenges that were time consuming and incurred heavy maintenance costs.
- Inability to meet business requirements due to inflexible business rules
- New policy implementation takes too much time
- Cumbersome process of drawing fragmented data across disparate systems
- Duplication of efforts across multiple systems
- Lack of centralized view of risk leading to inaccurate, inconsistent reporting
- High cost of operations; Huge efforts for reconciliation
- Multiple Product Engines & Channels; High cost of maintenance & support
- Rigid technology and accelerated obsolescence
- Systems working in silos causing integration and interface issues
- Implementation of new policies or even small changes require heavy customization
- Data inaccuracy due to extraction from multiple sources
Multiple systems with different hardware and software, with some of them being legacy and outdated, made integration an extremely difficult task. This had become the biggest roadblock to policy changes, especially the ones that needed to be implemented across the ecosystem. Data issues, inconsistent reporting and the lack of a centralized view posed a huge risk in a world where security breaches and were becoming a big threat to the global financial sector.
RBI wanted to implement a centralized Core banking solution to cover all its offices including banking and accounting operations. The objective was to implement a Core Banking solution (CBS) that has cross functional and seamless integration of banking applications as well as banking operations performed by select departments. It was looking for the following features:
- Centralized solution, meeting process flow and work flow requirements for RBI
- Scalable solution with high performance OLTP and batch processing
- Seamlessly integration with its existing IT ecosystem
- Provide a single GL, supporting multiple constituent balance sheets, with a centralized and common database, seamlessly integrated on a real time basis with other systems in RBI like RTGS, ICCOMS, E-treasury, CTS etc.
- Solution that can plug in future regulatory and functional requirements with shortest go to market timelines
- Solution that can provide highest levels of security in operations, functional / workflows, database tables, interfaces, data uploads and downloads, portal services etc, including digital signatures, PKI implementation, LDAP server integration and two factor authentications.
From a business perspective, RBI was clear that the CBS should offer products and services in the capacity of ‘Banker to Banks’ and ‘Banker to Government’ and cover the following:
- Manage government debt and service government collections and payments
- Manage currency in circulation as a liability
- Manage large volume of agency bank serviced operations including currency chest management
- Operate large number of clearing house operations
- Provide payment infrastructure across Banks in the country
- Manage liquidity of banks and government on a real time basis
Product / Solution provided
The Core Banking System for a central bank is significantly different from the Core Banking System in a commercial Bank. There are several functional and business requirements that are specific to large central banks.The system needs to support very high TPDPA and the bulk of the load in the system will be from RTGS, NEFT and portal channel transactions.
Intellect’s Quantum Central Banking Solution (QCBS) offered exactly what RBI was looking for. QCBS is designed specifically for Central banks, unlike other systems that use force-fitted versions of commercial core banking solutions. It unifies four universes – governments, banks & FIs, cash and securities. The key differentiator of QCBS lies in underlying technology design, particularly when rich functionality is a prerequisite. It drives four clear mandates
- Real time informed decision making & Risk Management
- Unmatched configurability for speed and ease of change
- Tightly integrated analytics
- Non breachable security
Intellect implemented the world’s first cash-security integrated Core Banking System for RBI. It also provided full support for a smooth and secure transition from several disparate systems, along with an operating capacity to process over 100 million transactions per day.
The implementation included the following solutions:
- Intellect QCBS
- Depository solution
- Settlement engine
- National payment system for gross and net settlements
- Public debt management solution
- Three dimensional central bank portal (online banking services) for banking & FIs , governments and citizens
The progressive modernization initiative helped RBI move away from silos and unlock significant value across its huge IT ecosystem. Apart from increased financial and operational efficiencies, the immediate benefit from seamless integration of all its systems, product engines and channels is that RBI can quickly implement new policies or bring changes to existing ones in days as opposed to months or years before. Process automation also reduced manual intervention and staffing requirements. The Intellect QCBS at RBI is fully equipped to meet its current as well as future requirements be it from a policy or a security standpoint.
Immediate benefits to RBI:
- Over 95% operational risk reduction
- Elimination of reconciliation for 30,000+ transactions among 29 regional offices
- Real-time information availability to the senior management team for effective decision making
- Anywhere Banking for the government and banks
- Fully automated real-time view of government and bank balances via single general ledger and centralized maintenance of accounts
- Single point of entry of information which can then be accessed seamlessly across departments
- Integration with RTGS,ICCOMS, IES, MNSB, CCIL, E-Treasury
- Portal for government and banks to facilitate services like tax collections, remittances, etc
- Operational efficiency via process automation and elimination of manual reconciliation requirements
- Near real time reporting of information across departments
- Extreme account processing to handle high levels of TPDPA (Transactions Per Day Per Account)
- Enterprise GL : Real time GL and Balance sheet – multi-entity, multi-currency, multiple Books supported
- Security:Role based security and authorization levels, operating system/application security, logical access control and antivirus management
- Digital certificate along with user id and password
- Audit logs to maintain historical foot print of transactions performed by various users, transactions from all delivery channels should have traceability
Trusted by the central banks in many countries including India, Seychelles, Ethiopia, Sweden, Lesotho and now Armenia, the Intellect QCBS solution deploys a formidable array of advanced technology frameworks including Extreme Account Posting (XAP), Run Time Re Use (RTRU), and Look Ahead Processing (LAP) technologies. Intellect is the proud recipient of the Payments Provider of the Year Award-2016 and Technology Provider of the Year Award-2015 from the Central Banking Forum. Intellect also won the prestigious Asian Banker award for the ‘Best Central Bank Technology Project-2013’ for this large scale modernization initiative at Reserve Bank of India.