Introduction and General Background:: CVC Directive

Introduction and General Background:
CRM and the Banking Sector:
- 3 tier decision system
In March 2000, there was little penetration of IT at PNB with systems being deployed in only
500 odd branches. Seven different software were used on thirteen different UNIX distros,
most of which were run on standalone PCs with no concept of networking. Overall expertise
in IT among users was low.
Reasons for CRM Implementation:
Being a public sector bank, there were initially no efforts or reasons to implement
centralized, computerized processes, but there were a few external factors that forced the
top management to seriously consider IT. They also made them realize that there was a lot
of opportunity in IT infrastructure that would propel growth for the future.
Some of the factors for the CRM path have been listed below:
CVC Directive:
During the time when the bank had around 4000 branches, the Central Vigilance
Commission (CVC), a government body set up to watch for corruption and related crimes,
issued a directive to the bank to computerize 70% of its business by December 2000.
RBI Online Tax Guideline:
The Reserve Bank of India, in ____, issued a guideline stating that it was mandatory for
industries to pay their taxes online, through any of six banks in their list. One of the banks
named was PNB.
Competition:
ICICI Bank Ltd., was formed in 1994 as a bank and by 2002, it was entrenched into the Indian
bank sector and was known for providing highly reliable service at lightning fast speeds.
This, along with the entry of other banks into the networked banking era, further pushed
PNB to be oriented towards CRM.
Financial Objective:
PNB had set a financial target of achieving Rupees 4 lakh crore worth of business. In addition
to capturing more customers for this, there was a focus on cutting down of costs to improve
profitability. This was envisioned through an idea known as ADC (Alternate Delivery
Channel).
The basic objective was to reduce the number of situations for which a customer had to
walk into the bank branch, such as ATMs for withdrawals, and Internet Banking for
transfers. The logic behind this was that entertaining a customer inside a branch involved
use of bank resources like stationery, lighting and employee hours, which turn out to be
more than the cost of implementing ADCs.
Since the implementation of ADCs is a task requiring intense centralization and networking,
this too became a major reason to
Strategic Objective:
Apart from the competition angle, the company, realizing that consumers were becoming
more aware and more demanding than ever, decided to change its strategy to focusing on
providing Quality Services to Customers, in order to sustain business.
Implementation of CRM:
Steps Taken:
The deliberate and planned implementation of PNB started when the bank fumbled to meet
the CVC’s requirements. With the help of consultants, PNB devised a two-pronged plan of
action:
 Short term goal – Meeting the CVC deadline of 70% computerization

 Long term goal – Creating a nationwide, core-banking infrastructure
In order to meet the CVC deadline the bank decided to deploy simple IT infrastructure so
that it could computerize 70 percent of its business within the deadline.
The chronology of implementation is as follows:
Till March 2000: CVC issued a directive to all the banks to computerize 70 percent of its
business by December 2000. The bank which was not using IT very widely takes up the task.
March 2000-March 2001:
The hardware was made “plug-and-play” capable. For that two hardware vendors were
chosen and the application software was embedded in the hardware. The deployment of
the Nelito's package took branch by branch. First it was deployed at one branch and only
after the successful implementation it was deployed at another.
The bank had 14 training institutes where the internal training sessions for the bank
personnel were conducted. The source code of the product was tweak to facilitate
deployment. The IT team was especially given training to re-architect the source code, and
make any modifications, improvements, value additions, and enhancements.
CVC granted an extension of the deadline on the bank’s request and by March 2001, 70.60
percent of the bank’s business was computerized.
March 2001- May 2002
The bank, as a part of its long term strategy, started taking steps to implement a core
banking architecture. On 30 March 2001, the bank deployed Finacle- a core banking
software by Infosys. Infosys trained the 200- odd personal of the core team selected from
the bank’s employees which further modified and customized the product. Solaris,
hardware from Sun Microsystem’s hardware, was chosen as the server platform for Finacle.
PNB set up its own data center in New Delhi with the help of CISCO. Cisco also helped PNB
to develop and implement the network design to connect all its branches.
In April 2002, the bank launched a pilot project and introduced Finacle. By mid May 2002, all
data from the seven different softwares, which the bank had before, was successfully
migrated into Finacle.
By 2003, PNB had 101 branches on a WAN, deployed a core banking infrastructure, and runs
175 networked ATMs.
February 2009: PNB announced the successful deployment of country’s first ever 100
percent core banking system (CBS). The system was completed 4 months ahead of the
schedule says the firm.
PNB chose Reliance Infocomm's fiber optic backbone along with the leased lines in locations
where the optic fiber does not reach to ensure WAN connectivity to all of its branches.
Apart from that, currently, HCL Comnet monitors PNB’s nationwide network.
Results – Current Scenario:
Include Data Cleansing etc….
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Introduction and General Background:

CRM and the Banking Sector:

- 3 tier decision system

Reasons for CRM Implementation:

RBI Online Tax Guideline:

 Short term goal – Meeting the CVC deadline of 70% computerization

March 2000-March 2001:

March 2001- May 2002

Results – Current Scenario:

Include Data Cleansing etc….

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