Indian Banks: Looking for Alternative Technologies
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Code : COM0067
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Region : India
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Introduction:In the early 1990s the economic liberalisation in India heralded a change in the banking sector by opening gates for new private sector banks (PvSB) and foreign banks. These new players could start their businesses with a 'clean slate' with state-of-the-art technologies in place. The idea of IT implementation in banks took shape for public sector banks due to the potential competition from their private sector counterparts. Liberalisation also enabled an increase in the presence of foreign players, which made the banking sector in India more competitive. Before liberalisation the public sector banks (PSBs) were operating in an environment with little or no competition due towhich IT implementation was not a strategic tool. It was an era when technology was kept on a backburner. The private sector banks that came after liberalisation had the complete freedom to select quality man power and to upgrade their systems. These enabled them to offer better services than other PSBs or old private banks, which had long been operating in the protectionist era. The operating profits per employee for thePSBs, were also dismal as compared to their foreign and PvSB counterparts. The new PvSBs and foreign banks incorporated state-of-the-art processes and competencies and posed amajor threat to these old PSBs... |
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