| Close on the heels of the State Bank of India rejigging its business, Bank of India (BoI) has also embarked on a similar exercise.
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| BoI has created five separate strategic business units (SBUs) — one each for large corporates, SMEs, mid-corporates, retail, and agricultural and rural credit.
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| “About 1,000 people from operations will be redeployed as marketing staff for different business segments. It is for the first time that we will have focussed marketing teams for separate products,” said M Balachandran, chairman and managing director, Bank of India.
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| It was on consultancy firm McKinsey’s recommendations that SBI restructured its business to create separate SBUs.
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| The largest public sector bank also has a chief general manager in charge of each of them.
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| BoI has also a hub-and-spoke approach towards its retail banking business. The branches will soon serve as marketing outfits for various loan and deposit products, while the credit decision making and back-office processing will be carried out at the processing centres which will be located in six hubs across the country.
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| “Currently we are conducting a pilot in north Mumbai. The aim is to reduce the turnaround time for loans and to deliver service at the customer’s doorstep,” said the chairman.
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| Turnaround time is the amount of time a bank takes to sanction a loan after the customer submits all the requisite documents.
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| Through the hub-and-spoke model, the turnaround time for home loans will be seven days and the same for other personal and consumer loans will be 24-48 hours, said bank officials.
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| BoI has implemented core banking solution across 200 branches at a pace of 10-12 branches a week. By March 2006, the bank aims to have 500-600 of its branches interconnected through the core banking solution.
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| The next milestone is to put 750 of the bank’s branches which handle 80 per cent of the business on the core banking platform. |
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