Circular: Ref DBS.Y2K.BC/8/35.01.00/1999-2000 dated September 17, 1999
The Chairman/ Managing Director/ Chief Executive
All Commercial Banks Dear Sir: In terms of our Circular DBS.No.Y2K.BC/42/35.01.00/98-99 dated December 1, 1998 and DBS.No.Y2K.BC/47/35.01.00/98-99 dated February 27, 1999 banks and financial institutions were advised to attach high priority to the development, validation and implementation of Contingency Plans as an integral part of their Year 2000 programme. Banks have been advised to identify a range of Year 2000 scenarios, prioritise them in order of probability of occurrence and impact potential for business and lay down cost effective approaches to mitigate associated risks. Banks have been asked to maintain adequate cash inventory so that all cash transactions are effected on assured basis during the century date change period. As a measure of guidance banks were also advised to prepare hard copies of all their books and customer accounts as on December 31, 1999. It is important that while banks take necessary actions to be Year 2000 ready, they would need to constantly gauge public reactions to issues associated with Y2K. In this context all banks are advised to assess and hold the required cash for meeting any demands induced by the circumstance of the millennium change. For this purpose, banks should plan to build up their cash inventory well in advance in order to obviate the bottlenecks arising from the logistics of indenting, movement and distribution of currency notes. The Issue Offices of the Reserve Bank will be ready to service the requirements of the banks to enable them to commence building currency stocks right from October 1999. For inventory planning to be effective, banks need to review vault capacity, as also address related internal control, insurance, and security issues. Banks having Currency Chests are encouraged to get in touch with the nearest issue office of the Reserve Bank and ensure that their stocks are adequately replenished. On its part, the Reserve Bank of India assures that all its Issue Offices would have adequate stock of currency notes to meet any exceptional demand. Banks are also advised to identify Core Personnel at their Head Offices as also at each of their computerised operating locations. The personnel would need to be well versed in implementing the bank's contingency plans and reviving computer systems in the unlikely event of encountering problems on account of Y2K. As far as possible, banks should also enlist vendor support and have standby arrangements in their premises during the Year 2000 transition so that problems of technical nature could be expeditiously attended to. The banks would need to formulate and implement a personnel policy in order to ensure that the services of the Core Personnel are available sufficiently well before the century date change till the end of February - the Leap Year Date of year 2000. The Reserve Bank also considers it necessary for banks to adopt an appropriate 'leave policy' as well as 'transfer policy' so that the identified Core Personnel would be available right from December 15, 1999 through mid March 2000. We urge on the Chief Executive and the Board of Directors to be closely involved with the Year 2000 preparedness within their respective banks and subsidiary institutions. We would strongly encourage you to specify the actions taken on this letter in your monthly progress reports to the Y2K Project Cell. Yours faithfully sd/- (M.R. Srinivasan)
Chief General Manager |