Disaster Recovery and Business Continuity- A New Priority for Banks

Today, the role of IT has become so integrated and pervasive with banking that it becomes necessary to mitigate the operational risks arising out of failure of IT systems. Banking services came to a standstill in Mumbai on 26th July 2005, due to unprecedented heavy rains. It also affected banking services in other cities, as most banks have their central switch for ATMs and core banking solutions in Mumbai.

However, alternative data back-up centers established by banks in other cities saved the day. Timely action also saved the banks in protecting the data by transferring it to alternate centers in the country.

Reserve Bank of India (RBI) guidelines requires banking and financial institutions to have a disaster recovery plan in place. However, Reserve Bank’s study in April 2005 revealed that some banks were still in the process of framing a business continuity plan (BCP). It is imperative that all banks have BCP's in place to be in readiness to tackle serious business disruptions.

According to Mr Anurag Khanna, CEO, Banknet India, banks with centralized systems and advanced technology infrastructure need to take extra precaution, so that their services in other part of the country are not disrupted, due to disaster at major centers like Mumbai.

Mr Khanna announced that Banknet India's Bank Tech Summit, an International Conference organized on 22nd September 2005 at Mumbai will bring together more than 20 CTOs and Business Heads from major banks and IT Companies to discuss the issues like Planning and implementation of disaster recovery and business continuity, Managing business & technology risks in banks.

According to Banknet India, an IT focused banking research company, in last 3 months major banks like State Bank of India, Oriental Bank of Commerce, Canara bank, Bank of Maharastra have floated tenders to scale up their disaster recovery and business continuity systems. In coming months, such requirements will increase multifold as the banks in India are now looking at their business continuity plans seriously and gearing up to put disaster recovery systems in place.

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