The architect of India’s National Payments Dr R B Barman joins Bahwan CyberTek as Advisor. On his maiden visit to Oman, Barman shares his views on the benefits of having a seamlessly integrated payment system across the globe, in an interview with Mayank Singh.
Dr RB Barman, is well known for his expertise in core areas of statistics, econometrics, business information technology and payment systems. He worked as an executive director in-charge of these areas in the Reserve Bank of India (RBI) till 2008. Dr Barman is now an independent adviser and director in public and private sector companies. He is also associated with academic institutions as adjunct professor, chairman of Research Advisory Committee etc. He has recently joined Bahwan CyberTek as an Advisor for its payments & banking business. Excerpts from the interview:
Your list of specialisations include statistics, business information technology, econometrics and payment systems. How did you acquire a specialisation in such multi-disciplinary areas?
I was driving IT initiatives in the Reserve Bank of India (RBI) for eight years and as a result acquired a specialisation in IT and payment systems. Statistics and economics are my academic background and are also my core competency. This combination of expertise provides certain advantages, as you would get to understand in the course of our discussion. I started as a statistician, joining the Indian Statistical Service and from there in 1979 I moved to RBI at a higher level, joining as a deputy director. The RBI was looking at strengthening its research set up both in economics and statistics, by lateral induction, and I joined the central bank at the age of 31 and worked there for the next 29 years.
After joining RBI, I thought that I should get a good grounding in economics, so I took a break and went to IIT-Bombay, Mumbai to do a PhD in economics, focussing on industrial economics. In 2000, I became the executive director, RBI as a part of that IT and payments system became a part of my portfolio. For the next eight years I was driving IT and payment system initiatives in RBI. We took a lot of measures in the payment system field during this time after the financial sector scam in India in 1992, as people took advantage of the time lag in settlements and did kite flying. As a result we were planning to put in place a more robust e-payment system – RTGS. I signed the contract for RTGS in 2001 and when it was implemented in 2004, we were a year ahead of China in implementing it. In the course of time we created national retail payments infrastructure such as NEFT, NECS, mobile payment (IMPS), Cheque Truncation System etc., launched RuPay debit card. Electronic Benefit Transfer (EBT) and Aadhar based biometric facility for authentication are other major initiatives launched to transform retail payments landscape in India. National Payments Corporation of India (NPCI) has been set up as a not-for-profit company to create robust infrastructure for clearing and settlement of retail payments, apart from development of payment products for nation wide rollout.
In 1998, we started a data warehouse for the RBI; at that time data warehousing was coming up for the private sector, but it was at nascent stage in the central banks. The architecture of data warehouse has online analytical processing capability making it very powerful for analytical purpose. An ability to sift data according to analytical needs by looking up, down and across at ease, over time and space, is what a data warehousing initiative is. This requires a data model, for organising the data in a particular way, which gives users quite a bit of flexibility to drill down, drill up and across so that one can see a multi-dimensional view of a particular market and gain much better insight on the forces driving the market and associated risks. Even the most advanced central banks in the world did not have such an advanced data warehousing system at that time. When we implemented a data warehousing system in RBI, I did a presentation in IMF and at the Bank for International Settlements (BIS) and in both the places this was accepted with a lot of enthusiasm. This was something new in respect of subject orientation and associated data model and our neighbouring countries started coming to us to understand our model.
What prompted you to join Bahwan CyberTek as an Advisor?
I visited Bahwan CyberTek in Chennai, and I was very impressed with what they had done in the areas of national payment systems for Middle East and Far East governments, the quality of its resources and the expertise that it had built up in payments & banking solutions. We developed mutual respect and admiration and formed this relationship, thanks to them, I must say. Bahwan CyberTek is etching the next generation of payment systems growing its Cuecent ePay platform to offer cutting-edge solutions and payment business models; and it was felt that we could together create this for their customers and enhance the prospects to empower thought leadership and innovation, hence this association. The globe is becoming a small place and we should be in a position to participate in various parts of the world to make the world a better place and IT is a very big enabler for such initiatives. So I thought that coming on board Bahwan CyberTek and seeing the work that they are doing will give me a chance to see and understand the initiatives taking place in this part of the world; and how we can align ourselves in these as a part of a long run global integration process and payment system is a wonderful initial step to achieve that.
Is a payment system model being used in India easily replicable in different parts of the world?
Very much so. India is already a part of the SAARC initiative, which has been going on for the last five years. We have been looking at integrating the payment system initiatives in Sri Lanka, Bangladesh, Bhutan, Nepal, Pakistan, Afghanistan, Maldives as a part of the SAARC initiative. This is a model that can be extended to other countries. I believe that initially a country develops a payment system that in the course of time becomes a regional block, like you have a GCC initiative here. Similarly, Europe has a SEPA initiative, North America has an initiative involving the US, Canada and Mexico. South America has an initiative, Japan and China have their own systems – these initiatives are a natural process that a country initiates. We can link these initiatives through technology to achieve a seamlessly integrated global payment system and that’s the vision that we would like to pursue globally and standards which are being laid down.
Why is it important to seamlessly link various global payment systems and does it present distinct advantages?
Payment is fundamental for the banking and financial system. When a person puts his money in a bank, the idea is that he should be in a position to use that money whenever required and this money used to happen in various ways in earlier days. Today it is the age of electronic money, so you need to look at e-money. Secondly, today people are moving all around the world and there is movement in various ways – some come for jobs, others for business or tourism. People are also increasingly participating in the financial markets of other countries. If India is growing fast, through rise in productivity and innovation, its capital market may be in a position to attract capital from other countries. Investors and companies would like these investments to come in fast, necessitating the entire cycle of clearance and settlement to happen quickly and we need to integrate for such purposes. Then there is anti-money laundering, which is an international commitment. We need to see that money laundering and terrorism are under check. This is important not only for an international system but also for nations. In globalised competitive economy, capital flows to places that provide the maximum growth potential, and to support this there should be a provision for moving money from one place to another seamlessly. All this is possible if there is a robust state-of-the-art payment system. Governments are striving hard to reduce currency (cash) in circulation as it has high opportunity costs and associated risks. National payment systems such as Cuecent ePay directly help address these issues besides creating a shared services platform that aggregates country’s needs for payments acquisition and fulfilment; and shared access and delivery channels to achieve financial inclusion by bringing all on board.
We hear a lot about Big Data and the challenge that it presents. How far are we in a position to do adequate data warehousing?
Today, data warehousing tools have advanced quite a lot, mainly because of a few things. First of all, the computerisation of transaction processes in the last ten years all over the world has enabled various institutions to capture data at the transaction level. Various segments of the economy are also getting computerised. Even while buying an asset one has to do it electronically, thus enabling us to capture that data on the asset side. All this allows one to look at data at a micro level. I believe that we can develop a data warehousing initiative – a kind of a micro-macro analysis framework for economic analysis capturing the changes in distribution underlying economic dynamics. This is a dream, but this is not impossible ten years hence. We are building data block by block, and if we are able to marshal the data at the micro and macro level, we can sift through the process and forces in the economy in a much better manner, helping us to understand causalities and transmission channels better. This will give a much better insight for formulation of policy and its evaluation.
About Bahwan CyberTek
Bahwan CyberTek evolved as an Omani IT products and solutions company which successfully forayed into global markets spanning 20 countries across four continents. Its Cuecent ePay Suite enjoys regional leadership in National Payment Systems in ME region besides powering payments and remittances for several large government agencies, banks and telecom majors in the markets it operates.