[sbinews] SBI merges tech platform with associate banks (Economic Times)
- From: Rajendra Pai <rspai9@xxxxxxxxx>
- To: sbinews@xxxxxxxxxxxxx
- Date: Wed, 7 Apr 2004 19:57:17 -0700 (PDT)
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SBI merges tech platform with associate banks
SHAJI VIKRAMAN & SANGITA MEHTA
(Economic Times)
TIMES NEWS NETWORK[ THURSDAY, APRIL 08, 2004 01:25:16
AM ]
MUMBAI: Without waiting for the legal stamp of merger,
State Bank of India (SBI) has gone ahead and
integrated its technology platform with its associate
banks. This could well be the first step towards a
possible merger of the associate banks with SBI. The
bank has put in place a common IT network and
accounting system which would enable a smoother merger
of associate banks with SBI once its receives all
regulatory and legal approvals.
The proposal for a merger of the seven associate banks
with SBI is pending before the government. ?As far as
I am concerned, a virtual merger of associates would
be a reality very shortly, but a legal merger would
take time,? Mr A K Purwar, chairman of SBI, told ET.
At the same time, Mr Purwar did not rule out
consolidation in the banking industry.
?All associate banks are integrated in the sense that
they have a common technology platform. Besides, there
is co-ordination in treasury and large-value clients.
We all share a common culture,? he added. However, it
may not result in a complete integration of credit and
treasury departments as RBI norms require an
arms-length distance between the two. SBI is the
country?s largest bank with a marketshare of 19%,
while the SBI group (SBI and associates) has a
marketshare of 25% in deposits and advances. However,
the merger of associates, as recommended by consulting
agency McKinsey, would require amendments to the SBI
(Subsidiary Banks) Act, 1959, the SBI Act and approval
from each of the seven states of the associate banks.
For customers, integration of associates with the
parent and implementing a core banking solution will
give them the benefit of online remittances between
branches of two associate banks, or with a branch of
the parent bank. The seven associate banks ? State
Bank of Hyderabad, State Bank of Indore, State Bank of
Patiala, State Bank of Saurashtra, State Bank of
Bikaner & Jaipur, State Bank of Travancore and State
Bank of Mysore ? posted a net profit of Rs 1,407 crore
for March 2003, while SBI?s net profit was Rs 3,105
crore.
At the same time, the integration process is helping
SBI in saving costs. For instance, a common IT
platform has helped the group in negotiating a better
price from its software and hardware vendors.
Meanwhile, the SBI group has networked all its 3,600
ATMs and plans to increase the number to 5,500 by
March 2005. Simultaneously, SBI is networking its
branches to implement the core banking solution. On a
pilot run, 40 branches are operating on the core
banking solution and the bank has identified 3,000 of
its 9,000 branches for core banking.
=====
R.S.Pai,
Manager (Training)
SBI, STC,Bangalore
Additional email address:
rspai@xxxxxxxx
Web: http://rspai.tripod.com
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