Blending Tradition with Modernity : Ananthakrishna

Interview Questions

Full Interview with Ananthakrishna

Ananthakrishna:

Ananthakrishna: IT certainly helps. This year's (turnover) target is higher than last year by Rs 5,000 crore. This increase comprises Rs 3,000 crore in deposits and
Rs 2,000 crore in advances (lending). Our strategy is to use our human resources to reach out to more people and canvas for business. The automation of all our 411
branches will free up time for our people. And having all branches on a core banking solution will create procedures, which will enable our people to access data easily.

 

Ananthakrishna:

These are new names for old finance ideas. We've been giving microcredit for some time. We have people who borrow between Rs 5,000 and Rs 10,000, though we don't call it microcredit. Today, there are many organizations which, in the name of micro-finance, make money as intermediaries. We lend to these organizations, which lend but at higher charges. I believe in reaching the customer directly and we have been doing this.

 

Ananthakrishna:

Yes. As a bank, we started and developed with that focus. And today the focus is still on farmers and rural areas.

 

Ananthakrishna:

Retail has different definitions. Another term for it is SME (small and medium enterprises) finance. Let me say that we started retail banking. About 75 percent of our business used to come from retail. Today, if you look at our portfolio, we have 50 percent from retail and 50 percent from other advances. We would like to  maintain this balance, and grow in both.

 

Ananthakrishna:

Today, every bank has IT facilities. With IT, I've found that work cultures have changed. The human element is minimized. We are trying to offer IT-related products with a human touch. That is our USP.

 

Ananthakrishna:

We started the core banking implementation in 2000. We were among the first to deploy the solution with a lease-line from BSNL. Between 2000 and 2001, we faced hiccups in areas where communications and power supply were problems. We realized that in rural areas, especially in north Karnataka, electricity and communication were 'casualties'. So, we tried VSAT and solar power to get around these problems. Today, our branches are covered 100 percent.

 

Ananthakrishna:

Yes, it was. We had seen the outside world, so to say. We knew that in future, this was going to be the order of the day. Our former director, the late Mr K.K. Rao, encouraged me to move in this direction. It was his vision.

Ananthakrishna:

Since we have a core banking facility, we should now use this information for analytical purposes. Today, we are storing and analyzing data in a data warehouse.

This project has been on for a year now. And then, there is the BASEL II implementation, centralized processing for uniformity of data and compliance. Compliance with AML (anti-money laundering) rules is another issue. Today, we have to know our customer from an AML perspective. These are some of the areas where IT is being used.

 

Ananthakrishna:

No, transactions continue without any hindrance. Earlier, data pooling was an issue because no machine was available and we received handwritten information via post. Today, data pooling is very easy. It is available online.

 

Ananthakrishna:

I do think that we've become too IT oriented at Karnataka Bank. I believe that IT is an enabler and not a substitute for the human touch. This is our philosophy.

 

Ananthakrishna:

I don't really spend that much time on IT. But then, I have technically-qualified and competent people. Whenever we have issues, I call them and we thrash out these problems. These issues are mainly communication and upgrade problems.

 

Ananthakrishna:

This program started in July last year. By September, we had the systems in place.

Until then, we did not measure and analyze risk. We had a gut feeling of what the risk was, but it was never measured. Today, we are documenting this for external analysis. Our disaster recovery (DR) setup, which was put together three years ago, was also meant to mitigate risk. We segregated disaster recovery into two geographical areas. The main center runs in Bangalore, and the DR division is situated in Mangalore. We have not outsourced this project.

 

Ananthakrishna:

Traditional banking works on a department basis, so we call our CFO, CIO and general managers of different departments. Our CIO-equivalent does play a large role in formulating policy. Any decision at Karnataka Bank is taken collectively. We involve all the operating people at the GM level. We sit together, and a final decision is taken.

 

Ananthakrishna:

Number one: IT should facilitate customer service. We should be able to give customers whatever they require immediately. Number two: IT should help us to put in place systems so that we comply with all regulations.

 

Ananthakrishna:

From junior programmer, I joined the bank in 1971 as a scale-1 officer. I became CEO after 28 years of service. My analytical ability, which was honed by mathematics and an exposure to IT, helped me to understand banking in a different way. In a more analytical sense, it was also my initiation into computerization.