However, with the Reserve Bank's stipulation (1994) that 4,000 bank branches be computerised by end 1996, the issue became more urgent. Indian banks were already caught up in the phenomenal global tide of Information Technology (IT), plus, economic liberalisation within the country and competition from foreign as well as private banks acted as powerful catalysts in hastening mindset changes. With over Rs 300 crore invested in IT, and Indian Banks nowhere near the target figure get down by the RBI, the $64 million question is, has this investment helped the banks atall?

The Centre for Organisation Development (COD), Hyderabad recently held a programme to determine the restructuring and change management in banks/financial institutions. COD is a non profit society, established in January 1980 to promote research on management and development of organisations in various areas of national interest. The programme director was L G Kulkarni, who retired as Dy MD SBI. Other participants included GM's and Dy GM's from banks such as Bank of Baroda (Bhopal), PNB (New Delhi), Dena Bank (Mumbai), SBI (Patna), Canara Bank (Bangalore), Syndicate Bank (Manipal) and others.

While de-regulation and globalisation have, no doubt, thrown open now opportunities to financial institutions, new challenges have also emerged. An effective response to these challenges calls for a fundamental rethinking of business strategies. The opening of the financial sector to global market forces has made the environment volatile, at the same time providing limitless opportunities for growth.

Among thetopics discussed during the five-day programme were productivity in commercial banks, and the purpose of IT in banks today. It was largely felt that the term IT has been continued to focus on computerisation per se, and not its use in enhancing overall strengths. Further a Bangalore study carried out in 1995 showed that IT improved productivity in banks. But has this productivity helped the banks?

While this may have proved true in the case of class banks, wherein the clientele is sensitive to quality, there has been no appreciable difference in the case of public sector banks thus far.

Indeed, a significant emphasis was placed on customer satisfaction, by all the participants of the programme. The key point singled out was that it is not so much what is actually provided as what is perceived and experienced by the customer, that eventually matters. The most common cause of dissatisfaction is the simple yet necessary task of cheque encashment/obtaining a DD, vis a vis the duration of time taken to processthe same.

Nonetheless, while these are example of individual cases, banks have an entirely different set of problems when it comes to corporate clients. Therefore, it is in all contexts that investing in IT makes better business sense indeed, the Bangalore study referred to earlier reported that 38.30 per cent of respondents felt that the overall quality of services was good after the computerisation in a public sector bank.

Touching on the topic of productivity now, it is common knowledge that commercial banks play an important role in the country's economy, by financing the requirements of trade, industry, and agriculture. The banking structure at present is the outcome of a process of expansion, with pre-nationalisation and post-nationalisation as the two distinct phases of the developmental process that the banking system has undergone.

Productivity is basically an input-output relationship:

While one aspect of it is cost responsiveness, the other is the measurement of business. Whileproductivity for 1994-95 showed a rise for public as well as private sector banks, it was the highest in the case of private sector foreign banks, both before and after banking reforms, although public sector banks have, of late, been demonstrating their ability to cope with the new operating environment. As a result, the entire banking system now operates within a set of internationally recognised accounting norms.

According to the programme director L G Kulkarni, many banks have gone in for organisational restructuring exercises, generally with the help of external consultants, ``since 1971, when the State Bank of India was re-organised with the help of the Indian Institute of Management, Ahmedabad, there have been many such exercises in the Indian banking industry.'' He is however, of the opinion that reorganisation should not be done merely to keeping in view parachoial needs. There could be a thorough examination of the organisation concerned, with the next step being the tracking down of the rightagency for the task. ``Too many people tend to consider themselves to be experts in management, just because they have been managers for a number of years, forgeting that management is as much a specialised area as say, credit appraisal.''

He is in favour of the method practised by the World Bank and other important organisations, who even require the consultants, to spell out the precise man-hour individuals will spend on the project.

``There are organisations which have come to grief because the consultants, although highly reputed, had no matching experience for undertaking a massive re-organisation exercise and were themselves learning with the client, at the cost of the client of course.''

Kulkarni is of the opinion that structural change by itself cannot deliver the goods; the change has to be visible to the people affected, ie the employees themselves. The organisation has to be ready for the change, with total commitment from the management.