Customer Solution Case Study
/ / Punjab National Bank Dramatically Improves Rural Banking in India
Overview
Country or Region: India
Industry: Banking
Customer Profile
Punjab National Bank (PNB) is one of the leading public sector banks in India. It has a large retail-banking network of over 4,400 branches and service counters that spreads out into far-flung and remote areas.
Business Situation
PNB was faced with the prospect of increased competition from new private and international banks. It also faced the challenge of linking all of its branch operations into a cohesive entity to serve its customers. The bank's operations serve a widespread population that speaks many different languages.
Solution
PNB chose BancMate from Natural Technologies to run its branch banking operations on Microsoft® Windows Server™ 2003 and Microsoft SQL Server™ 2000.
Benefits
n Bilingual software improves customer relationships.
n Easy to implement and troubleshoot.
n User friendly, cuts training time.
n Scalable from very small to large. / “The Windows Server 2003–based solution was easy to implement as well as maintain remotely across our network of far-flung rural branches.”
K. S. Bajwa, General Manager–IT, Punjab National Bank
Punjab National Bank (PNB) is one of the 500 largest banks in the world, and enjoys a rich history and heritage. PNB was the first Indian bank to be started solely with Indian capital. Established in 1895 at Lahore, and nationalized in 1969, it has worked assiduously to build the banking sector in rural and urban India. It has presence in remote areas of the country, cutting across cultural and linguistic boundaries. Computerization of the branches for data accuracy, operational ease, facilitation of customer interaction with banking products, and centralization of data was of concern for remote branches. One of the important reasons for choosing BancMate—a multilingual Total Branch Automation (TBA) package for rural and semi-urban branches—was that it is based on Microsoft® Windows Server System™, which provides ease of learning and intuitiveness, as well as the ability to easily implement and support solutions based on it.
Situation
The Punjab National Bank (PNB) enjoys a long and rich history; established in 1895, in Lahore, in the then undivided India, it was the first bank to be started solely with Indian capital. Subsequent to the partition of the country, PNB was popularly known as an Indian Bank. As part of the nationalization of banks that happened in 1969, PNB was also nationalized.
Today, PNB operates 4,070 branches and 443 service counters across the country, consolidating its position as one of the top nationalized banks of India. PNB has been ranked at 395th position amongst the top 1000 global banks by the prestigious international publication The Banker.
Like other scheduled banks in India, the PNB also comes under the guidance of the Reserve Bank of India (RBI) and as a government establishment, it has to follow directions of the government. Two directives, one from the Reserve Bank of India and the other from India's Department of Official languages are key in this context. In 1985, the Department of Official Languages mandated that all electronic equipment used in ministries and departments of the government and their attached and subordinate offices would need to be bilingual. That is, they should be able to handle both Hindi and English. By the year 2000, the Reserve Bank of India had mandated that banks should have a clear IT plan that should be implemented: that at least 70 percent of all branches should be computerized.
“We have been able to deploy the BancMate solution at over 2,300 branches in India over the last two years, which is a unique achievement.”
K. S. Bajwa, General Manager–IT, Punjab National Bank
At this time, PNB was perhaps the least computerized bank in the country. Not only that, almost the entire IT team was new. From that time onwards, PNB has come a long way, winning laurels for its innovative approach to IT implementation. It started out by first purchasing over 4,000 standalone PCs. As the next step, PNB needed to find a solution that would automate its business processes and link the existing PC "islands" into a more meaningful and manageable network.
Business Situation
Meanwhile, the banking environment in the country had undergone a sea change, with private banks and international operators entering the fray, and both retail and corporate banking operations becoming increasingly competitive and under cost pressure. Effectiveness of customer interactions was also coming under pressure with rising business volumes.
IT Infrastructure at PNB
With technology emerging as a key driver of business growth, the bank has taken a number of IT initiatives to provide its large clientele spread all across the country with the best of technology while retaining the all-essential human warmth. Its core banking system (CBS) already acts as a single data bank, a backbone to 2,108 service outlets with internet banking services spread over 28 states in the country. This deployment has lent PNB the status of being the largest core banking system in Asia.
The bank has 676 ATMs and also coordinates with the MITR group of six banks with 2,200 ATMs. PNB is a member of Institute Development and Research in Banking Technology (IDRBT)-sponsored National Financial Switch (NFS) for mutual ATM transactions. NFS at present has 18 banks and a pool of 6,197 ATMs. PNB has also pioneered the cheque truncation system in India. Other software fuelling the systems are instant fund transfer mechanism, data warehouse for decision control and MIS and risk management software based on Basel II guidelines set by the Bank for International Settlements.
About 77 percent of its business is connected through leased lines, ISDN and VPN. Other services such as mobile banking, utility bill payments, funds transfer, e-commerce and CRM through mobile shall be introduced for the PNB branches including setting up a network operating centre (NOC) to monitor the CBS network.
Since all the major branches are fully computerized and networked, PNB offers value-added services like 'anywhere anytime banking' through ATMs, and Corporate and Retail Internet Banking Services. New online services have also been developed—bill payment, railway ticketing, and payment of fees. For these initiatives PNB bagged the Nasscom Best IT user award in 2004 in the BFSI sector. Other acknowledgements: ITIL's certification for best practices in data centres; BIS certification for 116 offices; ISO 2000 certification for services.
Solution
It was in this context that the IT team set about evaluating various solutions for retail automation and settled on BancMate, the multilingual solution from Natural Technologies Private Limited for retail and rural banking operations.
BancMate is unique in the fact that it is a multilingual retail-banking package. A user can simultaneously use two languages within the system. Microsoft® Windows Server™ 2003 operating system (part of Windows Server System™ integrated server software) was chosen as the implementation platform because of wide familiarity with the platform, as well as ease of operation and support, given the far-flung and remote branch network that the bank operates.
The roll-out began in 2001 (on Windows® 2000 Server operating system), and today, more than 2,300 branches are using BancMate for total branch automation and a total of around 2,400 locations will be automated by 2006. “We have been able to deploy the BancMate solution at over 2,300 branches in India over the last two years, which is a unique achievement,” comments K. S. Bajwa, General Manager–IT, Punjab National Bank.
BancMate runs on Microsoft Windows 2000 Server and Windows Server 2003, with Microsoft SQL Server™ 2000 as the database. The client runs on Windows 95 and later. In smaller branches, a peer-to-peer network on two machines running Windows 98 provides the infrastructure for running BancMate.
It took nine months to customize the 24 modules of BancMate to meet PNB’s needs. The Windows Server System–based solution provides an easy-to-understand interface, reducing not only installation and support costs, but also training costs.
PNB’s Confidence
Viewing the robustness of the package on the Windows platform in all aspects, PNB decided to enter into a marketing agreement with Natural Technologies to sell out the product to other banks at a reasonable price.
PNB and Natural Technologies have marketed BancMate so far to seven public sector banks, 30 regional rural banks, one private sector bank, one state cooperative bank, and two cooperative banks across 28 states of the country.
Awards for PNB and BancMate
PNB itself has gone on to win many awards for its innovative approach to IT implementation. These awards include the ‘Best Bank Award for Excellence in Banking Technology’ by the Institute for Development and Research in Banking Technologies, Hyderabad, and the “Wharton Infosys Business Transformation Award–Enterprise Transformation Award’ for technology. PNB also received the ‘Innovator of the Year,’ award from PC Quest, a leading Indian IT magazine, for bringing in the regional language support for rural banking that is provided in BancMate.
Benefits
Commenting on the benefits of BancMate and Windows Server System, Bajwa says “We chose BancMate as our rural banking solution because it is a robust solution. Together with Windows Server 2003 and SQL Server 2000, it has never given us any trouble. In addition, new IT staff members also find it easy to adapt to the solution.”
Easy to Implement
The implementation process is simple, fast and user friendly. In the last two years, PNB has been able to implement almost 2,300 branches to BancMate and plans to complete implementation to an approximate total of 2,400 locations by 2006. Adds Bajwa, “The Windows Server 2003–based solution was easy to implement as well as maintain remotely across our network of far-flung rural branches.”
User Friendly Software Cuts Training Time
The entire retail banking process is covered in just two screens in BancMate. This makes it very easy for bank employees to adopt the new technology. The advantage of the easy-to-use features can be seen from the fact that PNB branches at rural locations have been running this solution successfully and have not faced any resistance in adoption.
“The simplicity of the Windows interface has helped reduce training costs by bringing training time down to ten days. We chose BancMate as our rural banking solution because it is a robust solution. The operating system and database has never given us any trouble. In addition untrained manpower also finds it easy to adapt to the solution,” explains Bajwa.
Easy to Troubleshoot
Further, the ease at which networking and configuration could be done—and troubleshooting—on the Windows platform meant that PNB was able to get the infrastructure up and running very fast, even in the remotest of branches.
Bilingual Application Software Improves Customer Relationship
BancMate enables the bank to meet the directives of the Official Language Act of the country. BancMate gives the bank the ability to maintain the database in Hindi and English, as required.
The multilingual solution has helped the bank maintain a better relationship with its retail and rural customers. By providing bank statements in the local language, PNB is able to bridge the divide in rural locations as well as with semi-literate customers. PNB has been able to effectively improve collections as well as to reduce bad debts and non performing assets in this market segment effectively. This is primarily due to local language support in Windows and BancMate.
Scalable from Very Small to Medium Operations
The scalability of the solution—from a two-computer network to a larger one—meant that the bank could save on implementation costs by right-sizing the infrastructure to the needs of the particular branch.
Future Plans
PNB has decided to have only two banking software solutions in the bank, in other words, either a core banking solution or BancMate. All the branches running on different legacy software will be migrated to either of the two solutions by June 2006.
PNB has chosen Natural Technologies to develop additional modules on BancMate to enhance its features and meet the growing needs of PNB. These modules are being integrated through a distributed architecture with BancMate and a centralized architecture comprised of the bank’s core banking solution. These modules are:
n Proposal tracking solution to manage business proposals.
n Collection of excise and sales tax as per government of India regulations.
n Pension solution for government and personnel pensions.
n Retail lending module for consumer loans, vehicle loans, and so forth.
n Structured financial messaging system for online remittance transactions between PNB branches.
n Real Time Gross Settlement system for inter-bank remittance operations.
PNB and Natural Technologies are now working towards consolidating the entire distributed BancMate data at the head office for the purpose of generating an enterprise-wide reporting system.
PNB and Natural Technologies are also developing a new bilingual BancMate centralized core banking solution based on Windows Server 2003 and SQL Server 2005.
About Natural Technologies Private Limited (NTPL)
Natural Technologies Private Limited has created bilingual and multilingual solutions primarily for the banking industry. Natural Technologies is in the business of application development, consulting, distribution of software products, systems integration, and data processing.
Microsoft Windows Server System
Microsoft Windows Server System integrated server infrastructure software is designed to support end-to-end solutions built on Microsoft Windows Server 2003. It creates an infrastructure based on integrated innovation, Microsoft’s holistic approach to building products and solutions that are intrinsically designed to work together and interact seamlessly with other data and applications across your IT environment. This allows you to reduce the costs of ongoing operations; deliver a more secure and reliable IT infrastructure; and drive valuable new capabilities for the future growth of your business.
For more information about Windows Server System, please go to:
www.microsoft.com/windowsserversystem