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IT in Banking 2003 (Special)
  Perspectives of: CTOs of Banks in India
How RBI's initiatives for Payment and Settlement system will impact customer service & efficiency of Banks?

According to Mr V Chandrasekhar, General Manager & Chief Technology Officer, Bank of Baroda, RTGS / SEFT will addresses the requirement of the customers for moving funds across bank branches at almost the same cost they pay for the normal remittance facility.

The Real Time Gross Settlement (RTGS) project would create a major upheaval in the banking sector. The real time payment across Banks & regions would revolutionise the payment mechanism in India, according to Mr Ravikiran Mankikar, Chief of Information Technology, Shamrao Vithal Co-Operative Bank.

Mr C.N. Ram, Chief Technology Officer, HDFC Bank, is of view that Reserve Bank of India initiatives on RTGS, which have been introduced in a systematic manner, will lead to technological upgradation in banks. Now banks will have to put proper Information Technology systems in place to participate in RTGS and provide the benefits of improved payment systems to their customers. If they lag in this area they will loose their customer to other banks.

Mr Pravir Vohra, Chief Technology Officer, ICICI Bank feels that though in future the customers will have faster and cheaper instruments of movement of funds across the country as well as quicker realisation of cheques, but banks will be left with lower levels of float funds. Mr Neeraj B Bhai, Chief Technology Officer, IDBI Bank, is also of view that for customers it will mean availability of faster and cheaper instruments of movement of funds across the country as well as quicker realisation of cheques (once truncation comes in - but that is some time away). For the Banks the increased efficiency of funds movement and settlement will mean shrinking of available floats and partial/ significant cannibalization of some of the existing products (e.g. Cash Management Services).

Mr Neeraj Bhai, however feels Banks will be able to ride the available infrastructure to introduce their own funds transfer products. They will have to price these products appropriately. In due course one will see this pricing also getting subjected to competitive pressures.

Mrs S A Panse, Deputy General Manager (Information Technology), Bank of Maharastra also feels that NSS, coupled with connecting the service branches of the banks and Treasury with RTGS for settlement of all the transactions on real time basis, would have an impact on the FLOAT funds. With connectivity established across the banking industry, there would not be much availability of floats and this would have a major impact on the costing of various services being offered by the banks. Thus it would be imperative on each bank's part to establish a full-fledged Costing department (If not done already), and rework the service charges structure.

Mr V.K. Ramani, President (Information Technology), UTI Bank. is of view that the Special electronic funds transfer (SEFT) opens up a significant business opportunity Large trading and distribution firms can effectively implement e- procurement systems with settlement of transactions across the banking system taking place under the SEFT. Large public sector Banks and the new generation private sector banks who have made substantial investments in the IT infrastructure have an opportunity to offer a wider range of services through multichannel delivery systems backed by the RTGS and SEFT for funds settlement.



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