The Hindu Business Line : `IT will help banks to explore more business opportunities'

Mr B.R. Bhat, General Manager of Corporation Bank, delivering a lecture on `Banking in the IT age' at The Hindu Business Line Club at MSNM Besant Institute of Post-graduate Management Studies, Mangalore.

Mangalore , Jan. 2

BANKS will be able to maintain their profitability by investing in information technology (IT), according to Mr B.R. Bhat, General Manager of Corporation Bank.

Delivering a lecture on `Banking in the IT age' at The Hindu Business Line Club at MSNM Besant Institute of Postgraduate Management Studies, Bondel, in Mangalore on Saturday, he said that IT is being used in most of the operations in the banks.

This has helped the field staff to perform higher value tasks such as meeting the clientele and generating fresh business. It has also enabled banks to take up a larger role than before in undertaking non-fund based business activities such as selling bancassurance, working as agents for mutual funds, and collecting government dues.

As per international trends, competition will ensure that interest spreads between return on advances and investments, and cost of deposits and borrowings thin out over a period of time.

"Banks will be able to maintain their profitability through improvements in non-interest sources of income and lowering of operational costs through investments in technology," he said.

Latest innovations such as RTGS and other electronic payment platforms, which are introduced by the Reserve Bank of India, are likely to make movement of cash fairly redundant in the near future, he said.

Time taken to encash cheques is likely to fall substantially once `cheque truncation' technology is introduced. Under this, the cheques do not have to be physically moved from centre to centre. Rather the image of the cheque is transferred electronically to branches concerned.

These factors will make sharing of knowledge about financial issues among banks, between banks and their clients, and among the general population faster. This help in the efficient working of banks.

Mr Bhat said that the service of a large group of people, who do not have the capacity to pay for relatively higher operational costs, will be possible only through intensive use of IT and knowledge processing packages.

Some banks are already working on developing ATMs that do not require expensive air-conditioning, have arrangements for alternative power supply, and require biometric means of identification such as fingerprints. All these aspects will facilitate ATMs' extensive use in villages with little infrastructure and for villagers who are generally illiterate.

To a query by a student that whether the IT usage in banking industry will bring down job opportunities, he said the skilled manpower is always needed for the banking industry.

Mr T. Ravi, Senior Regional Manager, The Hindu, Mangalore, welcomed the gathering. Mr K.B. Monnappa, Assistant Regional Manager, introduced Mr Bhat to the meeting.

Mr M.P. Hrishikesh, Director of the institute, presided over the function.