Financial Daily from THE HINDU group of publications
Saturday, Nov 20, 2004

Cross Currency

Group Sites

Money & Banking - Public Sector Banks

BoI awaits Boston Consulting report to revamp business

Rukmani Vishwanath

Mumbai , Nov. 19

BANK of India is expected to revamp its business strategy based on the recommendations of the Boston Consulting Group, which will submit its report to the bank shortly.

Boston Consulting Group (BCG) is undertaking a profitability study aimed at reducing the bank's costs and enhancing its profits.

"The report should give us an idea as to where we are engaged in profitable business. If we identify these areas it will be easier to fix our priorities," Mr M. Venugopalan, Chairman and Managing Director, Bank of India, told Business Line.

There are three basic areas that the consultant is looking at, which are product profitability, SME strategy and some aspects of the business process reengineering.

BCG is studying the various products being offered by the bank and gauging their profitability. Wherever necessary, the consultant will offer suggestions to either introduce new, or redesign existing products, which is expected to give a boost to the bank's retail business.

"For example, everyone has a savings bank account. But incentives and add on benefits can be offered on the basis of balances maintained," said Mr Venugopalan.

As on the first half of the current financial year, BoI's retail credit stood at Rs 9,215 crore constituting 25 per cent of non-food credit of the bank. Housing loans at Rs 2,064 crore constituted 5.51 per cent of non-food credit while mortgage loan increased by 182 per cent. The bank also has plans to grow its business to the small and medium enterprises sector and to this end BCG is scrutinising the bank's performance in this area as well.

According to Mr Venugopalan, the bank sees good scope for business in the SME segment. "We want to encourage small scale industries to grow into healthy medium size enterprises," he said.

In the context of business process re-engineering exercise, where the bank is adapting core-banking solutions, the bank is trying to identify ways in which it can capture bigger business volumes.

As on the first half of the financial year 2,551 branches of BoI across the country have been computerised, out of the total 2,574 branches. All the branches of the bank are expected to be computerised by December. Ten branches have been converted to core banking mode on pilot basis and 100 branches will be under CBS (centralised banking solution) by March 2005 and 750 branches by March 2007.

More Stories on : Public Sector Banks | Restructuring

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Securities rise; rupee stable

Banks can extend finance to purchase second-hand assets
RBI okays trade with Myanmar in freely convertible currency
Allow high-cost debt repayment at minimal charges: PHDCCI
BoI awaits Boston Consulting report to revamp business
United Bank H1 operating profit up at Rs 336 crore
PLRs: Already on the steep side
Offloading bad assets — High stamp duties a dampener for banks, FIs
IOB(Vizag) to conduct trade credit Utsav
ICICI Bank-HPCL credit card feat
IndusInd Bank hikes deposit rates again

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2004, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line