With E-banking, BPCL Improves Customer Relations

More so with international crude prices fluctuating the way they have.  "Our largest customers are petroleum dealers and LPG distributors across the country. These dealers and distributors are resellers of petrol, diesel and LPG and their business was running on cash-and-carry strategy, managed through cheques, demand drafts," says S. K. Joshi, director (finance), BPCL.

Around 10,000 banking instruments to the tune of Rs 150 crore per day were handled at over 350 BPCL locations across the country. "The cash and carry strategy was leading to inordinate delays and put pressure on liquidity," says Joshi. He knew that he had to revamp the entire collection process.

BPCL realized that if it automated the whole process, life would become a lot easier.  The oil giant went the e-banking way and integrated the process of money transfers from the customer's bank to BPCL's bank through the E-biz portal. In the new system, says Joshi, the customer has to place an indent over the Internet for the product to be purchased and ask his bank to remit funds to the designated BPCL account.

The BPCL banker receives the funds and credits the BPCL account, after which the customer account in BPCL's ERP system is credited with the amount. The requested product is dispatched to the customer who receives an SMS informing him about the status of the order. The customer can check his statement of account with BPCL using the E-biz Portal.

Though the project was implemented using largely available technologies, it was not without challenges. "The dealers and distributors had to be educated on using the electronic fund transfer process. Workshops were conducted at each location," says Joshi. Although the banking systems in metros and II-tier cities were geared up for e-banking initiatives, banks in III-tier and rural locations took time to mature.

But, the benefits were substantial. Within eight months from the project's launch, 90 percent of the total collections (Rs 5,000 crore per month) was moved to the e-banking mode - all this without any cost to the company.

The Person Behind It

S.K.Joshi

Director (Finance) BPCL

"Within eight months of the launch, 90 percent of all collections were moved to the e-banking mode."