A Study on Cyber Security Policy for Urban Cooperative Banks of Gujarat

Abstract

Urban Co-operative Banks (UCBs) play an important role in the economy's financial sector. Till 1996, these banks were allowed to lend money only for non-agricultural purposes, however, this distinction does not hold today as the scope of their operations has widened considerably. UCBs have seen several changes in their operations and functioning throughout the years. They operate on a smaller scale compared with commercial banks; however, they endeavour to provide almost similar services like NEFT-RTGS, Internet Banking, Debit and Credit Cards, Locker Facility, E-Tax Payments, etc. to their customers. Banks' utilization of information technology has grown expeditiously, and now it has become a significant part of their everyday functioning. With the ongoing integration of digitization in their processes, Urban Co-operative Banks are also experiencing an increased frequency of cyber incidents/attacks. Thus, to forfend UCBs from such cyber threats and malignant attacks, RBI has introduced comprehensive cyber security measures that prescribe several controls needed to be implemented by UCBs on the basis of their digital depth and interconnectedness to the various payments systems. For better functioning of UCBs, RBI has also released a Vision for Cyber Security for UCBs, which prescribes several actions to fortify the cyber security infrastructure of UCBs. As per RBI guidelines, UCBs have made several changes in their existing hierarchy and functioning. There are many challenges that the UCBs of Gujarat face in the implementation of the prescribed controls, as it requires sizable investment in building cyber security infrastructure and recruiting competent professionals who can manage it. Not only this, the Covid-19 Pandemic has also adversely impacted the assets and resources of the UCBs. Even in these difficult times, UCBs in Gujarat have implemented most of the cyber security controls as prescribed in the framework. They have made significant progress towards completing the actions that come under Cyber Security Vision. However, some smaller UCBs are finding it challenging to implement all the controls as they do not have ample resources to be invested. Going forward, the guidance and support of RBI and other associated institutions will be essential for such UCBs to manage their cyber security infrastructure more efficiently.