The Working Group on Y2K issues set up the Reserve Bank of India under the guidance of Deputy Governor, S.P.Talwar to monitor the progress of efforts towards Y2K readiness in the banking and financial sector held a meeting on October 6, 1999 in Mumbai. In addition to the members of the Working Group consisting of the Executive Directors and Heads of Regulatory and Supervisory Departments of the Reserve Bank of India, public sector banks, Indian Banks' Association, the meeting was attended by Shri Ravindra Gupta, Secretary, Department of Electronics, Government of India, Shri M Damodaran, Joint Secretary, Banking Division, Ministry of Finance, Government of India and Shri M S Verma, Adviser, Reserve Bank of India.

The Working Group appreciated the release on the website and in the printed form of the Update on Year 2000 Preparations in the Banking and Financial Sector reporting the progress made up to the end of August 1999. All the 103 commercial banks and their 40 non-banking subsidiaries accounting for bulk of the banking business in the country have reported full Y2K readiness. The Y2K preparedness in the case of primary and satellite dealers, scheduled urban cooperative banks, and the financial institutions has been found to be satisfactory.

The Working Group deliberated on a number of issues relating to the progress made in formulation and mock run of contingency plans in simulated environment, disclosure of readiness status, the critical minimum parameterisation of contingency plans as a checklist, exceptional holiday on January 01, 2000 for public transactions, third party assessment, the progress made in ensuring adequate stock of currency at Issue Offices of the Reserve Bank of India and at Currency Chests and extension of collateralised liquidity support to banks.

The Working Group recommended the following:

• While the contingency plans are specific to the operating circumstances of individual institutions, it is necessary to observe critical minimum of the parameters that have been found to be common in the contingency plans. Such a parameterisation which would be circulated to all the banks will serve as a check list for operationalisation of contingency plans.

• Banks and financial institutions should continue the process of testing of the systems and contingency plans;
• In conformity with the international practices, January 1, 2000 (Saturday) may be declared as holiday for public transactions. On January 2, 2000 (Sunday) the banks should continue to provide additional comfort by testing their systems with the help of the core staff;
• Banks and financial institutions and Indian Banks' Association should share information on preparedness to have transparency and infuse public confidence/dispel mis-information and to this end banks may consider having websites dedicated for Y2K;
• Event Management Centres may be set up with core staff for reporting of roll over issues by banks branches to their controlling/head office and to the Reserve Bank of India. Aspects relating to infrastructure, personnel requirements communication protocols and the duties and responsibilities of the core staff would be shared among banks and the Reserve Bank of India;
• Liquidity support against collateralisation of excess non-SLR securities may be provided by the Reserve Bank of India subject to certain terms and conditions;
• Voluntary disclosures and process of third party assessment for deriving better comfort should be persisted with;

The Reserve Bank of India would be glad to receive any suggestions relating to Y2K in the banking and financial sector. The e-mail address for this purpose is: rbidosby@giasbm01.vsnl.net.in.