In November 2001 RBI has introduced the Structured Financial Messaging Solution (SFMS), an application which would be riding on the backbone of the Indian Financial Network (INFINET) intended as a measure, to ensure greater security in the process of electronic funds transfers. The SFMS provides security in the various electronic funds transfers services introduced by RBI such as he Credit Clearing and Debit Clearing and the retail Electronic Funds Transfer (EFT) system and prevents unauthorised usage

• The usage of the SFMS over the INFINET would automatically bring the benefits of safe, secure and efficient funds transfers

• There would also be the added benefit of settlement of inter-bank transfers taking place in the books of accounts of banks maintained with the RBI thereby providing for finality of settlement. SFMS would have adequate security measures incorporated, including that of PKI-Public Key Infrastructure, with encryption software comparable to some of the best implementations in the world.

Institute for Development and Research in Banking Technology (IDRBT) and Tata Consultancy Services (TCS) entered into an agreement on 15th February 2001 for deploying a Messaging Solution for the Indian Banking and Financial Sector. The solution aimed at providing Secured Multi-tiered Financial Messaging will enable Banks to send financial and non-financial messages across the Indian Financial Network (INFINET) in a secure environment.

The Structured Financial Messaging Solution (SFMS) is based on TCS's messaging gateway product COMS-eNABLER®. It is being customized and deployed in a multi-tiered architecture consisting of a central HUB, Bank Gateways and the Branch Front-ends. The solution allows the definition of message structures, message formats, and authorization of the same for usage by the financial community. Specifically, the banks and financial institutions will use the designated messages for a wide range of applications such as simple messaging, EFT (Retail, RTGS), ECS, Electronic Debit, online trading in Government securities, centralised funds query for Banks and FIs, Anywhere/Anytime Banking, Inter-Branch Reconciliation etc. through INFINET.

To use this messaging solution, banks must have their terminals in their branches connected through LAN, WAN or even PSTN lines to the server located at a central place in a city. The terminal can be accessed only by means of a Smart Card and a personal identification number (PIN). The messages will have to be digitally signed under a public key infrastructure (PKI).

Based on this platform, messages are processed in a safe and secure environment and banks and financial institutions will be able to ensure a secure electronic message delivery. An advantage built into the system is that it facilitates banks to launch innovative products across centres and cities, say the software developers. Another advantage is that it provides a safe and secure interbank communication. Individual banks only need to integrate their systems with the SFMS to leverage the facility. Applications such as simple messaging, electronic clearing system, electronic debt, online trading in Government securities, centralised fund queries for banks and financial institutions, anywhere anytime banking, inter-branch reconciliation etc, through INFINET are possible to be communicated through SFMS

The integration of existing bank applications would require interaction among the concerned bank, the IDRBT, and TCS and the bank's application provider. Application programme interfaces are provided for this purpose.

The Front-ends in the branches are connected to the Gateway(s), and in turn the Gateways are connected to a Central Hub. The solution is integrated with a Smart Card-based PKI infrastructure ensuring total privacy, integrity, security, encryption and decryption mechanisms with full acknowledgement and non-repudiation techniques. These will conform to ISO and ANSI standards, as recommended by the Dr. Vasudevan Committee Report on Technology Upgradation in the Banking Sector.

SFMS facilitates online message creation, which, after authorisation, is communicated across without further human intervention as in straight through processing (STP). The financial messaging system ensures that the Indian banking and financial services sectors are on a par with the rest of the world

Under the system, any financial transaction communicated between the two branches of two different banks, which normally took between one and three weeks despite computerisation, would now be completed within a few minutes. Being a Web enabled modular software, the solution facilitates either centralised or distributed messaging and works in a secure environment.

The security system is built on a Smart Card-based user access and the messages are secured via standard encryption and authentication services conforming to ISO and SWIFT standards. The system has provision for complete auditing, logging, time stamping and warehousing of messages.

TCS, which has engineered the software in close association with the IDRBT team, has built the messaging system on a similar solution developed for the Global Straight Through Processing Association (GSTPA). The messaging system is designed based on a multi tiered solution covering the Indian Financial Network (INFINET) hub, bank gateways and bank sites.

All banks public sector, private, foreign and cooperative and financial institutions can benefit through the system by being members of the IDRBT. The solution has been initially deployed, covering Punjab National Bank, Bank of Maharashtra and Canara Bank on a pilot initiative. A large number of banking and financial institutions have now leverage the facility.

With regard to inter-bank applications, the Reserve Bank of India (RBI) has already taken the initiative in implementing applications such as RTGS (Real-Time Gloss Settlement System), DVP (Delivery Versus Payments) and the CFMC (Centralised Funds Management System) which can benefit by using the SFMS system. The advantage with the solution is banks can link their high volume branches, irrespective of their categories, through connectivity such as PSTN or ISDN or leased lines to Infinet.