Global Trust Bank Merger A Challenging Task

by Hinesh Jethwani    Jul 29, 2004

With RBI proposing a merger of debt-ridden private sector Global Trust Bank (GTB) and public sector Oriental Bank of Commerce (OBC), how will the two collaborate from a technical perspective?

In an exclusive with CXOtoday, C. Yellareddy, senior VP & Head IT, Global Trust Bank Limited, said, “Currently we are pretty much clueless as to what’s happening. It’s totally up to the RBI or OBC to decide the further course of action as far as the technology collaboration is concerned. The merger presents a unique coincidence that will effectively make technical collaboration easier, as both GTB and OBC use the same Core Banking Solution (CBS), i.e. Infosys’ Finacle, and Oracle databases. However, the integration process will involve a lot of re-structuring and understanding, for which policy guidelines are an absolute must. We are looking forward to contribute in whatever way possible.”

Contrary to the popular belief framed largely by media hype, the bank is not witnessing any withdrawal frenzy from depositors, assured Yellareddy. “If there was a withdrawal frenzy, our databases would see a lot of update activity, which is not the case. Database traffic is much lower than what most people would have anticipated, as GTB mainly has high net worth individuals as its customers. A Rs 10,000 withdrawal is of no use to them, and the insecurity will fade away soon with the final realization of the merger,” he explained.

The lockdown was enforced with immediate effect, leaving the banks branch operations untouched. “As our IT system is highly structured, all operations were locked down almost instantaneously. All we had to do was down individual delivery channels like ATMs, Internet banking, mobile banking, etc,” said Yellareddy.

Describing some of the obvious foreseen challenges, Yellareddy said, “The amalgamation that RBI has decided is a long drawn process, and we will have to wait and see the results. Integrating the technological resources of two banks is essentially a challenging task, as there is always some variation between the two.”

“In this case, since GTB is a private player and OBC a PSU, the difference in terms of IT usage is fairly wide. OBC is still in the process of migrating its legacy, while we have been providing technology-enabled services since a long time. There is also the issue of the wide variation in the type of clientele that both banks cater to (With GTB’s customers qualifying as the more IT savvy kind). However, this does not in any ways imply a mismatch. We will have to go back to the drawing room, brainstorm and re-architect a lot of things. A complete analysis of the nitty-gritty’s of both architectures will be essential,” he added.

“Infosys can certainly provide a lot of technical insight into the technical collaboration project, and we can contribute significantly as well. Ultimately it’s up to the management of both banks to decided the safest possible model, which wouldn’t cause any inconvenience to our existing customers,” concluded Yellareddy.

GTB has a huge server network, consisting of 10 Sun RISC-based machines, 10 Alpha servers, and around 50 Intel based boxes. The network essentially connects 104 branches and 275 ATMs across the country, providing a wide array of services including Internet and mobile banking.

With GTB being placed under moratorium for three months to protect depositor’ interests, the bank will allow individual depositors to withdraw up to Rs.10,000 only from their savings or current accounts or any other deposit account through any of the branches. The moratorium order was issued as an application by the Reserve Bank of India (RBI).

RBI has already drafted a detailed Scheme of Amalgamation for the proposed merger.