State Bank IT Plan To Affect 35-40% Staff; VRS-II Coming

Mumbai, May 24: | Updated: May 25 2002, 05:30am hrs
The country’s largest commercial bank, State Bank of India (SBI), will be shedding more flab with a second voluntary retirement scheme (VRS). Also, it embarks on an aggressive information technology (IT) plan comprising seven major projects involving an investment of Rs 500 crore over the next 40 months covering all outlets.

Speaking to the media at the official inauguration of NCR Corporation’s new automated teller machine (ATM) channel management centre in Mumbai, SBI’s managing director, Y Radhakrishnan, said that the seven major projects which form part of its IT initiative are: Internet banking, ATMs, networking of 1,500 branches all over the country, asset-liability management, treasury management, core-banking solutions and trade finance.

But more importantly as Mr Radhakrishnan said, “The paradigm of SBI will change. As I see it, when the whole thing is implemented, there will be redundancies. There will also be a total redeployment and retraining of staff and redundancies to the extent of 35-40 per cent of the existing staff. There has to be a second VRS. We have already spoken to the unions.”

According to an analyst, SBI has about 2,10,000 employees as of now. It may be recalled that SBI’s first VRS in 2000-2001 saw nearly 23,000 staffers opting for the same.

Added Mr Radhakrishnan, “The efficiency of the bank will improve by 15-20 per cent after all the projects are implemented. We handle about 40 per cent of the Indian economy and thus, it will be a great boost to the Indian economy. All I can say is ‘the giant is on the move’.”

The second VRS announcement by SBI mirrors a similar move intended by Bank of India, which wants to reduce expenditure on staff by another Rs 2,000 crore. Over a lakh people had opted for VRS in the first round offered by the state-run banks.

SBI will use Satyam’s ‘Broadvision’ for its Internet banking initiative and Internet banking will be extended from 150 branches as of now to 500 branches before the end of the year. SBI has a strategic alliance with NCR for its ATMs which will increase to 1,500 by next year from the current 1,081. All future ATMs will be online and networked. The networking of 1,500 branches will be done by Datacraft and this system will be the backbone of SBI.

Said Mr Radhakrishnan, “The networking will enable branches to conduct transactions. The asset liability management solution is being sourced from Oracle while it will be a combination of Reuters and Unisys for treasury management.”

A Tata Consultancy Services (TCS) consortium comprising Financial Network Services, Australia and Hewlett Packard India will supply the core banking solution. TCS has tied up with F&S for the same. The solution provider for trade finance will be decided this week, according to Mr Radhakrishnan.

The bank is looking at an integration of all channels from branches to call centres, which in turn will be integrated with the products. The products will be in turn integrated with the asset liability management system. Thus, SBI will adopt a consolidated approach and move to a completely integrated system.