Transforming Indias largest bank
SBI Group has undergone a dramatic transformationfrom the single window
concept to automatic cheque truncation, State Bank of India is making massive
investments in technology. A K Purwar, Chairman, State Bank of India,
tells Deepali Gupta about the IT road that SBI will tread in 2005. by
What are your business objectives for 2005?
We see the State Bank Group becoming the largest financial group, offering a
full range of financial services comparable to that offered by the best banks
in the world. This will be in terms of profitability of operations, assets and
the level of technology used over the next few years. We already compare favourably
with some of the best International Banks on several financial indicators. We
want to achieve similar parameters in the remaining areas within the next two
to three years.
In 2005, we will concentrate on increasing non-interest income. There will be
a renewed thrust upon increasing our already high share of Government business
which we now perceive as a profit centre. We will continue to emphasise upon
lending to the retail, agricultural, SME and infrastructure sectors. The network
expansion of overseas offices will also be a future priority.
The introduction of a Core Banking Solution and the implementation of initiatives
under the umbrella of Business Process Re-engineering (BPR) will drastically
change the functioning of our branches. These initiatives will give us a competitive
Our IT plans for the near term include extending our Core Banking Solution to
cover 3,500 to 4,000 branches that account for more than 80 percent of our business.
We will also encourage migration of services to alternate delivery channels
such as ATM and Internet banking. We plan to bring all our foreign offices,
including joint ventures and subsidiaries, onto a common IT platform by June
2005. Keeping in view the increasing role of technology in our operations, we
will intensify our information security system. Coupled with the initiatives
under the BPR program, these technology initiatives are expected to lead change
management at SBI.
What strategic role will IT play in helping SBI achieve
We have made phenomenal advances in the use of information technology in banking
in recent years and have recognised the strategic competitive leverage that
IT provides. We have made a paradigm shift from the classic decentralised IT
model, to a centralised online, real time architecture. Our business strategies
are now supported by our bold IT initiatives. SBI's IT mission is to provide
state-of-the-art, world-class banking services to customers, bring about IT
synergy among group constituents, facilitate cross selling in tune with business
goals, and reduce transactional costs.
What are your focus areas, and how do your see IT enabling
Apart from our continuous efforts to grow in retail lending we recognise the
need to concentrate on mid-sized corporates and SMEs to mitigate the threat
of disintermediation posed by large corporates. We will also be lending to the
agricultural sector by means of SHG-Linked financing. SBI will explore more
avenues for increasing non-interest income. IT solutions in the government sector
for direct tax collections, pension payments and e-governance projects with
state governments will help us improve our already high share of overall government
Our IT plans support the above focus areas by means of fully computerised basic
process efficiencies. With the introduction of a core banking solution (CBS)
in a big way in the next fiscal we expect our processing capabilities to improve
as a result of the centralised database, improved MIS and better asset liability
management that the CBS brings. Process improvements and reduction in transaction
costs will improve our operating efficiency and let us provide customised products.
What are the existing IT driven projects?
Our current IT projects include:
- Integration of foreign offices onto a common platform.
- Extension of Core Banking & Trade Finance Solutions
- Aggressive marketing for Corporate Internet Banking.
- Tie-ups with other ATM networks, and extension of
the network to more than 7,000 locations.
- Focus on Cheque Truncation (MICR)
- Call centre services and a help desk to support
our expanding IT driven services.
- e-learning for internal skill development.
The increasing use of IT has helped us leverage the strength of the State Bank
Group and has led to group synergy. We now provide anytime, anywhere banking
through multiple delivery channels. The IT initiatives have given us the scope
for greater cross-selling within the State Bank group.
What value do you attribute to your IT network?
IT driven solutions are the backbone of any modern business. The power of information
technology lets us meet growing customer expectations and intense competition
for market share. Customer expectations are no longer confined to how well you
serve them, but also when and where. Multiple delivery channels are the norm.
Our IT solutions group is focusing upon alternate channels. IT also lets us
comply with the changing regulatory and corporate governance environment.
In short, our IT initiatives have played a huge role in transforming the State
Bank Group into a more responsive organisation ready to meet the challenges
of a globalised economy. The threat from foreign banks and new generation private
banks is here to stay. Our IT plans allow us to meet the competition successfully
and at the same time offer our 90 million customers a state-of-the art world
class banking experience.
Deepali Gupta can be reached at: email@example.com