Amid a surge in bank scams including the recent Rs 400-crore Citibank fraud, RBI is considering putting in place a system that would allow it to directly monitor all transactions at various banks.

Once in place, the new system will enable complete automation for submission of transaction returns filed by all banks to RBI, doing away with the need for manual intervention.

RBI has begun the consultation process for implementing the new system, which could require banks to upgrade their computer hardware and software solutions, said a senior official.

Although the submission of transaction reports by banks to RBI is already an automated process, it involves at least four steps that involve manual interventions.

Currently, banks receive information from their various branches, then integrate the data and store it, followed by data conversion and then data submission to RBI.

As per the proposed move, the entire data flow would be completely automated and would help the banks in terms of enhanced data quality, timeliness, and reduced costs, besides a direct oversight by RBI for any possible frauds.

The frauds in banking sector had hit a record high of Rs 2,017 crore in 2009-10 and the figure could go much higher in the current fiscal, given the trend seen so far.

A fraud case reportedly involving Rs 400 crore came to light last week and Police arrested a senior official at a Citibank branch in Gurgaon. The case also being investigated by RBI besides other agencies.

"An automated data flow from the IT systems of banks to Reserve Bank with no manual intervention will significantly enhance the quality and timeliness of data," RBI said in the consultation process for implementation of the new system.

"This will benefit the Indian banking sector by enabling more informed policy decisions and better regulation," it added.

Besides, the new system will also help RBI create a centralised data repository that can be easily leveraged for various purposes and would cut down on the time for investigations and other oversight operations.