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To meet competition from an increasing number of private banks, while at the same time providing superior services to customers, was not easy for Punjab National Bank-India's second largest public sector bank. Headquartered in New Delhi, with over 60,000 employees and more than 4,500 branches, PNB has come to epitomize global banking on a massive scale.

Given the scale of operations and the growing size of the infrastructure, updating systems capacity and improved performance became a business imperative for the bank.

There came a time when reforms in the financial sector saw foreign banks and financial institutions making inroads into the country, and changing the entire landscape of the banking scene in India. The combined forces of growing competition and a technology-driven paradigm shift in the Indian banking system led PNB to launch a full-fledged computerization update of its operations.

Prior to March 2004, PNB, already a very large bank, was growing beyond its capacity to efficiently support services. "The number of core banking branches surpassed 500. In the systems area, this growth was causing an increased I/O wait and decreased server performance," says RK Bansal, operational head, IT Division, Punjab National Bank.

Realizing the Need
The bank's interest in technology began in the year 2000. Changing regulatory guidelines at that time drove the focus on computerization, says Bansal. With local networks installed in a number of branches, the bank's various branches were at different stages of modernization. In most cases, data storage and backup were handled with portable media.

"Since the project began, we have been aggressively beefing up our IT infrastructure through initiatives across all major functions, departments, and branches," says Bansal. "While we are intensely focusing on newer initiatives we also wanted to leverage the existing IT infrastructure most efficiently," he says.

"Part of this was taken care of by the selection of an enterprise-class storage solution to support more than 2,000 branches of the bank in core banking," says Bansal.

The bank's requirement was of a storage infrastructure that would be cost-effective, reliable, scalable, and would be able to manage replication requirements, while being relatively easy to administer. The new storage solution was expected to support the overall efforts of the bank's IT staff.

Positioning to Deliver
"For PNB, IT was positioned to deliver value through improvement in the existing systems and procedures in order to maintain quality," he says. "The bank constantly works for business process re-engineering and system re-engineering," he adds. PNB finally settled for Hitachi's multi-cabinet enterprise storage systems.

"The software helped provide essential functions for management as well as an advanced set of tools for third-party application integration and optimization," explains Bansal. The software provided non-disruptive, host-independent data replication, providing copies for immediate access to and sharing of information for decision support or optimizing tape backup operations.

It also provided near-instant recovery from data corruption. "By enabling backups to run concurrently with production, the software increased the availability of revenue-producing applications," explains Bansal.

Today, thanks to the adoption of IT, PNB has a robust and efficient storage infrastructure. Now, the bank's data is reliably stored which consequently enables high performance.

Impressive Scores
The data solution contributed to taking PNB's overall performance improvements to new heights.

Apart from a high degree of reliability and scalability, reduction in per-transaction cost, increased business and greater convenience for customers, and a lower requirement for manpower were benefits that were visibly clear.

As Bansal points out, business per bank employee has nearly doubled while the number of employees per branch has declined-a clear indicator that the bank's focus on IT improvements has helped reduce manpower despite the huge growth in business volume. The return on assets increased to 1.1% in fiscal year 2005-06 from 0.77% in fiscal year 2001-02.

Reduced lead time in the ability to deliver various branch services and benefits from increased ease in handling voluminous business data has been seen in PNB. While day-to-day functioning is noticeably improved, Bansal says, "technology has played a significant role in PNB's overall efficiency, performance level and quality of service."

"We have not only been able to maintain the lead position among public sector banks, but the overall efficiency and effectiveness of the bank in all business parameters has also increased. As a result efficiencies have improved and lowered costs," says Bansal.

Urvashi Kaul
urvashik@cybermedia.co.in

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