RBI takes a giant technology leap

The Reserve Bank of India has taken a quantum jump in its use of information technology by installing a central database management system and an enterprise wide data warehouse.

All the development activities of the project have been completed and the solution is now operational.

A closed user group, covering RBI operations across the entire country, has been set up through VSAT and leased lines.

All that an authorised user needs to use the system is the browser software and a PC connected to the network.

Key departments at its central office, regional offices located in major cities and the 30,000 employees all come within the ambit of the data system.

i-flex solutions has been RBI's consultant and supervisor for the project. It has conducted the business discovery process, studied the existing processes and designed the data model. Tata Consultancy Services has done the systems integration and development.

Through this exercise the RBI has joined the select club of leading central banks in the world which use an enterprise wide data warehouse solution.

Says Vijay Sharma, head of consulting, I-flex, "It is one of the most complex such solutions of its kind which has a unified database and data management system covering the entire business spectrum of a central bank."

RBI officials feel it "has made a pioneering effort which has in a way put it ahead of its time. A technological decision support system has been set up whose success will depend on the quality and currency of data."

They explain that as no data model can be static, updating it and keeping it current become the next tasks. The success of the system will depend on how well it is used.

Underlining how new all this is to the bank, they clarify that "right now nothing has been replaced, only a new layer has been added."

Thoughts for the future are online electronic submission, e.g. a link with customs for submission of trade data. Right now there is virtually no automatic electronic submission of data.

A key gain is drastic reduction in time taken to respond to ad hoc queries, creation of 'single window' for any analytical need within RBI and integration of diverse data across departments of RBI. Also, the solution is completely scalable.

RBI has two key functions. As the monetary authority it has to constantly monitor and analyse economic data so as to size up and forecast the economic situation for the purpose of its monetary management.

Also, as the banking regulator it has to keep a watchful eye on financial markets to respond to and where necessary preempt emerging situations.

Simply put, it has to understand which way the economy is going so as to decide which way interest rates should go. Also, it has to be ready to jump in and take preemptive action if, say, it sees bank credit creating a stock market bubble.

The bank has a team of statisticians and econometricians who use historical as well as current data for the purpose of forecasting key macro economic variables. The project is expected to provide valuable support in their research and analysis work.

The solution also provides an integrated view of the financial markets which facilitates analysis of inter market dependencies and cross currents. Critically, it assists the bank in identifying early warning signals in the economy and market place.

In undertaking the project, RBI wanted to build an integrated enterprise-wide database management system that provides decision-makers, analysts and researchers online and real-time access to a central repository of clean and consistent historical and current data.

It also wanted to build a state-of-the-art decision support infrastructure with online analytical and processing capabilities. The project further aimed at enabling web-based access to the data warehouse.

To make all this happen the data available in different parts of the organization to be made to work together. This required synthesizing the data into a modern database with a metadata (data about data) 'catalogue.'

The utility of a data warehouse solution is that it can source data from heterogeneous sources, clean, filter and transform the data and store it in a structure that is easy to access, understand and use by the business users in the terminology they are comfortable with.

The bank has many reporting systems through which information flows to it from banks, corporates and other financial intermediaries at various frequencies.

The departments within the bank have been using different operating systems and platforms to process and analyse the data. The information has resided in many different files and in database structures developed by different vendors.

Considering that there were more than 170 source systems spread over 18 departments in different geographical locations and many on stand alone PCs, "this was one of the most challenging tasks handled by i-flex," adds Sharma.

In the first phase of the project, as part of the requirements gathering exercise, the i-flex team interacted with nearly 500 executives of the bank.

Based on this, it designed a comprehensive data model for the central repository and also dependent datamarts around major subject areas.

The second phase involved the design and development of the data warehouse solution based on the inputs from the first phase.

An organisation wide logical data model was prepared. Devising as auditing trail, back up and recovery were integral to the project.

In the third phase, hardware, software and networking infrastructure were put in place. The i-flex team assisted RBI in selecting vendors. During this phase, the i-flex team supervised development of the database, data extraction, transformation, loading and completion of end user applications.