Largest CBS Implementation In History Takes Off

by Amit Tripathi    Oct 21, 2004

For a bank that dominates 20% of the banking business in India, an ambitious initiative of centralizing its processes with a modern day core banking solution (CBS) that would take care of close to 15,000 branches, manage roughly 100 million customer accounts and monitor over 3500 ATMs, can by all standards be termed as the biggest CBS implementation in the history of this country.

At a press meet, A. K. Purwar, chairman, SBI, said, “We plan to take banking to the next frontier where service to the customers would hold the key to general acceptance in the market and this would be done leveraging technology.”

SBI has opted for FNS’s (an Australian company) BANCS as the CBS which is being deployed by TCS in a phased manner. As of now it has been rolled out to close to 260 branches of the banking colossus. But FNS sounds like a relatively unknown name in the market, among popular CBS’s like Flexcube and Finacle.

Defending the choice, Purwar said, “SBI’s reach in terms of banking dimensions cannot be compared to any other private or public sector bank in India. We therefore needed a solution that was robust enough to handle our massive customer base, and daily transaction volume. Thus BANCS from FNS was the natural choice by our standards.”

Speaking to CXOtoday, Uday Shankar Roy, GM-IT, SBI, detailed the challenges faced in this initial phase of implementation, “The realignment of earlier legacy systems posed a definite challenge for us and as we extend the reach of the solution to more branches in future, we are going to re-engineer more and more business processes of our bank.”

The bank is spending a massive amount (last year SBI spent close to Rs. 800 crore on IT) on its IT initiatives and over next few years it is going to spend an even larger amount. But how much reduction on transaction cost would be acieved once the CBS is fully rolled out? Says Roy, “We hope to reduce our transaction cost by atleast 15% initially. Over the years this can go up to 20 to 25%.”

The CBS interacts with Oracle 9i database and the branches are connected through various combinations of connectivity (2 Mbps for the corporate and high traffic branches, 128 Kbps, 64 Kbps etc) for which SBI has a contract with Datacraft.

The bank has already underlined its expectations, and is looking forward to certain concrete benefits post deployment. Roy emphatically mentions, “This will provide us a unified technology platform, help in standardization of systems and procedures, allow better management of funds and non performing assets (NPAs), and also faster response to market changes, and project a single view of the customer.”

Along with the CBS rollout, TCS is also integrating a trade finance system (TFS), Eximbills, from China Systems, with the CBS for SBI. Currently the TFS has been rolled out to 230 branches of SBI.

With the largest bank getting into the technology mode, what remains to be seen is the type of product offerings that the banking behemoth provides to fight competition from private banks in the country.