Computerization in Banks

Topics: Bank, Computer, Bank of Baroda Pages: 14 (4602 words) Published: November 9, 2010
Computerization in Banks: Implications for Organizational Development Kakoli Saha
There have been tremendous growth and diversification in banking activities over the last one-and-ahalf decades. Development of a sound and adequate information system has become a necessity to meet the challenges of growth and diversification. The Banking Commission and the Reserve Bank of India have appointed various committees from time to time. The Tandon Committee was appointed in 1974 which gave..the guidelines to banks for the follow-up of credit, the Talwar Committee was appointed to look into the customer services in the banks, and the Goipuria Committee reported on accounting procedures and maintenance of records at bank branches. The Talwar Committee on Customer Service in Banks had recommended computerization of some functions to avoid delays in customer service. Until 1983, there was no major breakthrough in mechanization and computerization in the banking industry. In September 1983, an agreement was made between the Indian Banks' Association and the All India Bank Employees' Association on the installation of electric/electronic machines (other than computers), microprocessors, and mainframe computers to support specified functional areas in branches, zonal offices, and head offices. In July 1983, the Reserve Bank of India (RBI) had appointed a Committee on Mechanisation in Banking Industry To consider the question of drawing up a phased programme of mechanisation for the Banking Industry bearing in mind the future expansion. (RBI Report, 1984, p 2)

Computerization of the workplace is beginning to gather momentum in India. The capabilities of computers—what computers can do for us—are discussed at length, but the effects of computers—what they do to us—are not aired so widely. If full benefits of computerization are to be realized, the way computers affect employees needs to be understood and tackled. In this article, Kakoli Saha shows how mechanization affects workers and draws implications of computerization for organizational development, taking the case of the introduction of electronic accounting machines in banks. Kakoli Saha is a faculty member, Bank of Baroda Staff Training College, Ahmedabad.

The Rangarajan Committee Report
Its report, popularly known as the Rangaraj'an Committee Report on Mechanisation in Banking Industry, is a blueprint for mechanization and computerization in banks. It covers various aspects of mechanization, for instance, the areas of banking operations to be mechanized and the type of machines to be installed at branch, regional, and head offices. Major recommendations from this report are given overleaf. The report also discusses machine and manpower resources needed and describes the mode of implementing the mechanization and computerization programme.

Major Recommendations of the Rangarajan Committee
• The Committee recommends that the process of mechanization should encompass activities at the branch, regional, and head office levels, with em phasis varying from one level to another. • At the branch level, a system will have to be so de signed to ensure generation of data as a by-product of the operations at the branch level. • Branch level mechanization should be implemented under either Model I or Model [I of mechanization. Mechanization: Model I Under Model I, stand-alone electronic ledger posting machines with attached memory modules will be installed. The machine will have a typewriter keyboard, a video screen, two floppy disc drives, and a printer. The machine: • maintains primary ledgers and posts transaction entries in them. • works out products and interests at periodical intervals. • prepares statement of accounts for customers, and • l i s t s standing instructions to be executed in the accounts. For different counters, dedicated functional machines should be developed. For example, one of the machines will be designed to generate day book and general ledger. On an...
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