A Step Closer To Digital Transactions

India became the 13^th nation to join the select digital club when cyber laws came into effect on 17^th October with the notification of rules under the Information Technology Act 2000 passed by the Parliament in May this year. This is quick going for a country where bureaucracy is perceived to be a bottleneck when it comes to translating policies into actions.

All credit should go to the leadership of Pramod Mahajan, the IT minister, for driving the initiative of notifying the rules on the dot and appointing a controller who would be the certifying authority for digital signatures. Former director of C-Dot, Kailash Nath Gupta is indeed a right choice for the post. His vast experience in IT and communications should help him to understand the intricacies involved in digital transactions and put them on a sound footing.

Yes, putting the process of digitalization of transactions on a sound footing is critical at this juncture because the nation is only laying the foundation for a mammoth structure called e-business. If the foundation itself turns out to be weak, we might very well land up in a precarious situation where the left hand would not know what the right one is doing. Which means the controller will have to use all his wisdom to ensure that market players use the right processes for their transactions.

Observing right processes from day one will make the lives of all concerned easy because there are not too many nations involved in digital transactions to learn our lesson from. All need to firmly believe in the maxim, 'well begun is half done' and ensure that the digitalization process begins well based on sound norms.

Norms will have to be worked out especially with regard to costs involved. Right now the picture is very hazy on this front. The costs can get easily multiplied because of the number of agencies involved. First, there is the cost of software involved.

The Karnataka Bank, for instance, is in the process of introducing digital signatures for transactions in its select branches with the deployment of 'Finacle' banking software from Infosys. The bank is waiting for directives from the Union Finance Ministry and the Reserve Bank of India (RBI) to introduce digital signatures of its clients.

What this means is that it won't be enough if only the IT Ministry works at a break-neck speed to implement cyber laws. The other ministries will also have to co-operate very closely to ensure that the cyber law regime becomes a reality.

Second, there is the cost of getting the signatures verified from a certifying authority. The certifying authorities -- right now the (RBI) and Securities and Exchange Board of India (SEBI) are in the picture -- will be given powers to issue digital certificates authenticating signatures. It is not clear how much these agencies will charge for their job.

In this context, the IT minister's word that everything related to the IT Act will be in place within two months is reassuring. As per the Act, a Cyber Regulatory Advisory Committee and a Cyber Regulatory Appellate Tribunal will also have to be appointed for the smooth implementation of cyber laws. All in all, there is a lot of hard work ahead for the IT Ministry to ensure that the initiative taken by the nation to go digital is pursued vigorously.

sylvesterl@cmil.com