As some state cooperative banks and DCCB have applied for permission to offer internet banking services, RBI has decided to allow StCBs and DCCBs to extend internet banking services to their customers. Until now, they were not allowed to provide Internet banking services to their customers.
Previously, in 2014, the RBI allowed all UCBs that met certain conditions to expand online banking with a “view only” feature, without RBI approval.
As a result, the guidelines issued to UCBs have been revised and uniform guidelines for all cooperative banks are now issued to replace previous guidelines issued to UCBs in this area. The revised guidelines applicable to all cooperative banks are as follows:
All licensed StCB, DCCB and UCB that have implemented a Basic Banking Solution (CBS) and migrated to Internet Protocol version 6 (IPv6) and comply with the guidelines prescribed in Annex I of this Circular may offer Internet banking services (display only) to their customers, without the prior consent of RBI. In the event that any service offered as part of the “view only” function requires two-factor authentication or a one-time password (OTP), banks may adopt the security features prescribed in Annex II of this circular, depending on these services.
Cooperative banks offering Internet banking services (display only) to their customers must ensure that these services are strictly intended for non-transactional services such as balance consultation, balance consultation, downloading of account statements, the request for the supply of checkbooks, etc. transactions based on funds are permitted.
Co-operative banks should report the start of service to the relevant RBI regional office (as well as NABARD in the case of StCB / DCCB) within one month after the Internet banking facility is put into service (display only) .
All licensed StCB, DCCB and UCB that have implemented CBS and also migrated to Internet Protocol Version 6 (IPv6) and meet the following criteria can offer transactional ease Internet banking to their customers with the RBI pre-approval:
CRAR of at least 10 percent.
Net worth is Rs.50 crore or more as on March, 31st from the previous year.
Gross NPA less than 7% and Net NPA less than 3%
The bank must have made a net profit in the previous financial year and, overall, have made a net profit in at least three of the four preceding financial years.
He should not have failed to maintain CRR / SLR during the previous fiscal year.
It has a solid internal control system with at least two professional directors on the Board.
The bank has a history of regulatory compliance and no monetary penalties have been imposed on the bank for violating RBI guidelines / guidelines in the two fiscal years preceding the year in which the request is made.
StCB, DCCB and UCB fulfilling the aforementioned criteria will be authorized to extend Internet Banking with transactional ease provided that they comply with the directives prescribed in appendices I and II of this circular. For this purpose, future StCB, DCCB and UCB should submit an application to the relevant RBI regional office (through NABARD in the case of StCB / DCCB) with the following documents:
A copy of the Board-approved policy on online banking services as well as a certificate from an independent auditor (CISA qualified) attesting that the IT and IT policy requirements prescribed in the RBI guidelines have been met.
A commitment to inform RBI of any material changes in the services / products offered by them.
The business plan, cost benefit analysis, operational arrangements such as the technology adopted, business partners, third party service providers and the control systems and procedures that the bank proposes to adopt to manage the risks.
The bank will report to the relevant RBI regional office (and also NABARD in the case of StCB / DCCB) any breach or failure of security systems and procedures and the latter, at its discretion, may decide to order a special audit / inspection. of these Bank.
StCB / DCCB who already offer Internet banking (display only) to their customers should immediately review their systems in light of these guidelines and report to the relevant RBI regional office (via NABARD), within one month from the date of issue. of this circular, the type of services offered and their degree of compliance with these guidelines. Deviations from the guidelines should be reported with an action plan indicating a timeline for compliance.
StCB / DCCB, which already offer transactional Internet Banking services, are advised to comply with the instructions contained in this circular and submit details of their business models, cost / benefit projections, etc. and obtain a posteriori approval from the regional office of RBI within one month of the date of issue of this circular. These requests should be routed via NABARD to the RBI regional office.