Interview Questions

Full Interview with M.B.N. Rao

M.B.N. Rao:

Our computerization drive dates back to 1985 with the installation of Advanced Ledger Posting Machines (ALPMs), which catered to the needs of our branches. We achieved 100 percent branch computerization in September 2004. All 2,587 branches of the bank are computerized. Our core banking project took off during 2005, and 330 branches have been migrated to the CBS environment that has an integrated voice recording system and offers Internet and mobile banking. With our infotech roadmap, all our branches will be brought under CBS by March 2008. We have expanded our e-enabled delivery channels with a host of client-friendly features. The bank has 1,275 ATMs that have value-added facilities like airline ticket booking. We have enabled an anywhere banking facility in 1,580 branches. Further, Internet and mobile banking facilities are available in 1,156 branches. We plan to expand to 2,575 branches by March 2008. Today, our IT platform caters to various processes mandated by the government. For instance, the OLTAS (On-Line Tax Accounting System) system has been implemented in 423 branches. A similar package, called EASIEST for Excise & Service Tax administration, is available in 143 branches. We have also put up a Web portal that monitors the finances of the Sarva Shiksha Abhiyan, a government initiative in Andhra Pradesh and Karnataka that seeks to universalise elementary education. It will be implemented shortly in Tamil Nadu and Puducherry. Since the prevention of cyber frauds is a challenge, we have set up a cyber lab at Bangalore, in association with NASSCOM and the police department. Primarily, it will facilitate training on cyber laws.

 

M.B.N. Rao:

Yes. Technology is a key differentiator in BFSI. The new generation private banks gained early bird advantages in market share mainly due to their state-of-the-art IT capabilities. It is healthy that banks in the public sector have also chosen progressive IT applications and are reaping benefits in products and processes. Technology has provided an enabling environment in vital functions like customer relationship management, asset liability management, risk management, internal control, customer profitability, cross selling, and R&D activities. Ideally, technology is expected to divert 60-70 percent of branch transactions to alternative delivery modes. This would make transaction costs effective and induce tech-savvy customers to shift to the bank.

 

M.B.N. Rao:

The effective application of IT yields several benefits to banks, especially in a dynamic, market-driven environment. Business strategies are now better executed. Computerization has also rendered some manpower surplus, which is an advantage. Today, Canara Bank has an outfit for marketing and customer relationship management to counter competitive pressure and get a greater share in the increased market pie. Computerization also enhances intermediation efficiency through convergence in service processes and delivery channels. Many of the lead players recognize these and prefer to effectively integrate their business and IT plans.

 

M.B.N. Rao:

IT enables quick, timely and efficient customer service on a 24x7 basis anywhere. Banking is becoming a volumes game, given the continued pressure on margins. Accuracy, speed and consistency are some of IT's important advantages. IT will have a multiplier effect on business volumes. Offsite, multi-purpose ATMs are examples of e-enabled growth. They also hive off pressure at the branch and facilitate further business development initiatives at branches. This will give the organization an edge in improving existing business, garner additional business, and increase business per employee. The prompt renewal of deposits on due dates, timely interest application, ATM cards with versatile features, Internet and mobile banking will all have a favourable effect on core business volumes.

 

M.B.N. Rao:

For 2007-08, we have earmarked over Rs. 250 crore under capital budget for various IT related activities. This roughly works out to about 0.1 percent of our turnover.

 

M.B.N. Rao:

CanBank Computer Services (a subsidiary of Canara Bank started by a consortium of six banks in 1994 to provide various services to the financial sector) is presently involved in several projects. This includes the development of packages for the Debt Recovery Tribunal (which was started by the Government of India for the expeditious adjudication and recovery of debts due to banks and financial institutions), the convergence of an integrated housing finance package with a centralized solution, Web-based inventory management, and SMS software.

 

M.B.N. Rao:

We are using Linux for our total branch computerization software called Integrated Branch Banking Software. On the whole, there is evidence of enhanced performance of the software with reduced instances of node hanging and data corruption. Nearly 540 branches of the bank are working with Linux. The use of open source in banking activities is good. It could, however, be put to better use.

 

M.B.N. Rao:

The CIO plays a catalytic role in the growth and structural transformation of the organization. It is commonly observed that technology is an enabler. But it is not so commonly realized that technology needs to be integrated with business to raise the bar, to attain global benchmarks and to drive profits. In all these, the CIO provides crucial inputs in transforming the face of the organization in conformity with emerging needs and the revolution of rising expectations.

M.B.N. Rao:

Effective IT absorption, as a key differentiator, brings a host of benefits including a reduction in transaction costs and the introduction of new e-enabled products and services. We have recently launched a comprehensive CRM project. Our current initiatives focus on introducing mobile ATMs, biometric ATMs, and e-kiosks in rural areas. We have already made several moves in the realm of total financial inclusion, and they are going to be driven by IT for deeper and a more cost-effective outreach to the un-banked and under-banked segments. Also, we are shortly launching an online trading facility. In software development, we have taken initiatives in key areas like lending automation processing system, anti-money laundering and Basel II implementation. Moreover, we have developed an in-house package for handling the activities of a service unit, which is the nerve center for inter- and intra-bank clearing transactions. Such technological initiatives are expected to enhance the business of the bank in both qualitative and quantitative terms.