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Banking > IT in Banking > Features > Banking on IT

 

[This article, written by the late Madhu Valluri was published by TOI in 1995. As told to banknetindia by Mr PG Kakodkar, ex chairman of State Bank of India , this article influenced him to initiate major exercise in computerisation of the largest Indian Bank.]


People tend to get carried away with the concept of computerisation. The trouble is most of us are overawed. And rightfully so. A computer is supposed to launch weapons, even create them. It is supposed to guide aircraft to safe landings, assist doctors in open heart surgeries, sniff out petroleum and gas reserves out beat Kasparov in a game of chess. Moreover, the computer is perceived as some sort of a superman capable of replacing people in their jobs.

That it can do all those things just mentioned is true. But what might come, as a surprise is the fact that more people use computers for commercial and business purposes than for scientific endeavours. The world's largest company, IBM has made and, makes its money selling business machines not scientific gadgets that make Patriot missiles. Many other information technology companies too have similar track records. There are hundreds of millions of PCs around the world and you can be sure that 75 per cent of those are used for accounting, payroll, word processing and project management.

The point being driven home is simply this. The need for information technology is felt most in routine technology and repetitive commercial chores which modern man is finding increasingly difficult to handle all by himself.

To understand this difficulty all you have to do is walk into a public sector bank anywhere in this country. It takes close to half and hour to fill out a demand draft, another half hour to withdrew cash and sometimes, more than twenty days to get an up-country cheque credited to your account. Add to this the irritation and sneers you get from harassed bank clerks and when you walk away they feel they are actually doing you a favour by keeping your money with them.

Look at it from another angle. You are a bank employee burdened with mundane, uninspiring work. All you do is post entries to a ledger, count out soiled, half-torn currency notes and spend Saturdays evening thumbing dog-earned files, monitoring interest accruals on loans given out to a thousand customers. You didn't pass your banking exams just to become a cog in the wheel. It hurts. More when your college chum walks in to announce that he's become a marketing analyst with Chase Manhattan in Hong Kong and enjoys a paid vacation to Bali. Marketing analyst? With a Bank? Well, well.

And it hurt a lot more when he says he's never used a pen for anything except signing important documents. "We use computers extensively, Even an entry level clerk has terminal sitting on his desk", your friend announces. Hmm, it's alright in Hong Kong or New York, you say to yourself, but if they bring in computers here I just might lose my job.

Wait a minute.

How many railway clerks lost their jobs after reservations were computerised? How many traffic assistants lost their jobs after Air India and Indian Airlines computerised reservation? And how many telephone operators lost their jobs after MTNL computerised its telephone exchange? On the other hand haven't the quality of services at these places improved? (If IA's service is the pits it's because of pilots and politicians).

Any IT manager worth his byte will tell you that the level of computerisation in the railways is fairly low. Scanning seat or berth availability, reserving it and printing out a ticket is low tech. If freight management, wagon movements and signaling too were computerised, the level of efficiency and service would have peaked. Yet, it's good beginning and a hell of a lot better than manual reservations, which was time-consuming and oppressive to both buyer and seller.

Similarly, if banks opts for a high level of computerisation, even if i.g. were to be achieved in a phased manner, they would not only be able to service customers better but would also reap bigger profits. In 1988 the Indian Banks Association (IBA) urged some of its member banks to experiment with total automation in at least one of their branches. Eight banks volunteered. Today, after five years, there are only 30 branches that have gone in for total automation.

Imagine, if this is the pace of modernisation, what would happen five years later when business doubles, workload increases manifold and bank employees are left grappling with archaic adding machines and calculators. Foreign remittances would get clogged in the pipeline, queues would lengthen at tellers' counters, passbooks would take weeks to update and senior citizens would be waiting for their pensions as clerks manually prepare pension scrolls to be submitted to the treasury.

It's real ironic situation. Here on the one hand we claim to be a nation of computer experts providing state-of-the-art solutions of Fortune 500 companies. On the other, our own companies, which can well afford computerisation, look askance when an IT proposal falls on the chairman's desk. If unions are the stumbling block, their leaders ought to be educated. Someone has to point out to union leaders that their telephone and electricity bills are computerised, so are their payrolls. Their own children, land the children of union members, nurse ambitions of going electronics. Why on earth then, are they opposed to computers in their work environments?

Lack of awareness, lack of will to accept change and to some extent lack of money is coming in the way of those companies that are in the business of handling the nation's money. These are surmountable problems. The sooner we address these issues the better it is for all of us.


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