When implementing a core banking system, restructuring the organization is vital for efficiency. Addressing employee resistance through clear communication, early stakeholder involvement, and support enhances adoption. Demonstrating quick wins and highlighting benefits builds trust, while ongoing feedback allows for adaptations. Overall, empathy and proactivity are key to a successful transition.
In 1985, Hari Prasad joined a bank in Meerut and was instructed to double his department's deposits. Prompted by a peon's comment about sex workers always having money, Hari proposed to open bank accounts for this marginalized community. Despite initial resistance, the idea was successful, quickly doubling the bank’s deposits. This innovative approach proved controversial but ultimately led to financial inclusion for a typically excluded group, earning Hari the respect and support of both his colleagues and local community during a time when financial inclusion was in its early stages in India.
The importance, of being correct and precise, is often highlighted in tasks and projects. However, an experience from a rural bank reveals that consistency, ensured uniformity and reliability, can sometimes outweigh accuracy. Both are pivotal in different contexts, like in software interfaces, record-keeping, and banking. Yet, depending on the situation, one could be more important than the other - consistency helps prevent errors and confusion, while inaccuracy can lead to significant losses.
The Trade Bank of Iraq (TBI) transformed the country's banking sector through the adoption of a centralized core banking system in 2010, despite political instability and infrastructural challenges. The system, implemented in partnership with London-based Misys, revolutionized daily banking operations, such as deposit management, trade finance, and financial record keeping. The initiative marked a significant milestone for Iraq's banking, facilitating financial inclusion and digital innovation, and set new standards for efficiency and accessibility in the sector.
Central Bank Digital Currency (CBDC) is the latest buzzword in the world of finance and banking. The Indian government has taken a major step towards digitization by launching a CBDC wallet. This move is expected to revolutionize the way financial transactions are conducted in the country. While there are some challenges associated with using digital currencies, the benefits outweigh the risks. As India moves towards a more digital economy, it is imperative that we embrace new technologies such as CBDCs to ensure greater financial inclusion and security.
Target-oriented or impact-oriented programmes refer to initiatives that are designed to achieve specific objectives or outcomes. These programmes are typically developed with a clear understanding of the desired results and the steps necessary to achieve them. The effectiveness of target-oriented or impact-oriented programmes is often measured by their ability to achieve their stated objectives and produce tangible results. As such, careful planning and monitoring are essential to ensure that these programmes are successful in achieving their intended outcomes.
The Indian rupee (INR) is gaining international acceptance, with 18 countries agreeing to trade in INR, and the UAE considering settling trade in rupee-dirham. Trading in INR offers benefits such as reduced exposure to exchange rate fluctuations, lower transaction costs, and enhanced economic sovereignty for India. While India aims for international currency status, challenges remain, including exchange rate volatility and capital flow restrictions. Despite challenges, INR's growing international use enhances India's economic influence and stability.
Credit Suisse was once one of the world's leading banks, with a reputation for innovation and excellence. But in March 2023, it shocked the financial world by announcing that it had run out of cash and was being taken over by its rival UBS. How did this happen? And what can other banks learn from its demise? Credit Suisse's collapse is a cautionary tale for all banks that want to survive and thrive in the post-pandemic era. They need to be agile, customer-centric, and responsible if they want to avoid becoming obsolete or irrelevant.
Silicon Valley Bank (SVB) was a well-capitalized institution seeking to raise some funds. Within 48 hours, a panic induced by the very venture capital community that SVB had served and nurtured ended the bank’s 40-year run. While relatively unknown outside of Silicon Valley, SVB was among the top 20 American commercial banks, with US$209 billion in total assets at the end of last year. Faced with higher interest rates, loss of IPOs, and a funding drought, SVB’s clients began pulling money out of the bank. Lenders somewhat similar to SVB are in an unfortunate situation. A failure to protect deposits over $250,000 could cause a loss of faith in other mid-sized banks. Analysts said SVB’s collapse is unlikely to set off the kind of domino effect that gripped the banking industry during the financial crisis.
The narration reflects on my experience at Punjab National Bank during significant process changes in the 1990s. It emphasizes the challenges and responsibilities of implementing a new loan classification system amidst concerns about profitability. Ultimately, teamwork and commitment led to a successful transition, instilling trust and efficiency in the bank's operations.
Indrajit Roy Choudhury 