Nabard ropes in KPMG to prepare integrated IT system

Written by Sanjay Jog | Mumbai | Updated: Dec 18 2008, 05:22am hrs
The state-run National Bank for Agriculture and Rural Development (Nabard), which has firmed up a plan to reposition itself to take on challenges in the current economic situation, has roped in KPMG as its IT/management consultant.

KPMG will study in detail all existing business processes (operational and administrative) and the flow of information across these business processes. The use of IT in the business will be studied both in business transactions and in Management Information System. The targeted requirements will be mapped in IT systems and then gap analysis will be carried out.

KPMG will suggest a feasible integrated IT system for Nabard which proposes to set up direct financing subsidiary and an independent micro finance unit. Besides, Nabard plans to set up independent supervisory board as at present 89 of 402 cooperative banks are licensed. Further, it proposes to segragate Nabcons (Nabard Consultancy) as an independent subsidiary. Nabard may hive off Nabcons as an independent subsidiary once gross income touches Rs 40 crore.

Nabard sources told FE on Tuesday that it has sought suggestions from its employees to help KPMG for recommending integrated IT system for Nabard. "This is an excellent opportunity for us to have a re-look at our business processes and critically analyse the systems and procedures currently prevalent in our organisation. We must come up with views and suggestions on simplifying / rationalising the systems and procedures keeping in view efficient delivery and cost reduction. Further, we may also identify the redundant processes which can be dispensed with, without adversely affecting our main functions," Nabard said in its missive to employee.

Nabards decision to go in for an integrated IT system is crucial when the direct financing subsidiary is under consideration as ground level credit (GLC) flow is expected to grow from Rs 1,96,000 crore in 2008 to Rs 11,17,000 crore by 2018.

As reported by FE, Nabard will explore option of direct finance area based projects by creating or taking over branch network. Besides, area based projects, Nabard can finance value chains and venture capital financing. " Moreover, Nabard has realised that its capacity to influence direction of rural credit is getting marginalised and thus in a bid to provide focussed attention it proposes to set up refinance as an independent unit.