These assume greater importance in the context of the increasing spread of the concept of branchless banking. By all indications, retail payments are going to be the drivers of the future payment and settlement architecture. The Reserve Bank will take proactive steps towards their operationalisation but within a regulatory framework that will mitigate the risks.
My staff have advised me that they already have a cryptology for risk management – RISK, which would take into account the following: R – Recognition – to identify any risk early on and take proactive steps before it gets out of hand; I – Improvisation – of new methods, techniques and tools to secure better monitoring, and providing for a feed-forward rather than a feed-back system; S – Segmentation – to address smaller systems and sub-systems individually so as to address their unique features while also being mindful of the systemic impact; and K – Knowledge – to enable knowledge-based decisions in a knowledge-powered economy, resulting in scientifically-engineered and output-oriented action.