ICICI Bank ramps up cash management network

ICICI Bank has been able to expand its cash management system network to 5,000 locations through alliances with a string of public sector and private sector banks, making it arguably the top dog in the segment.

"Corporate clients want real-time information from at least 10,000 locations today," said Madhabi Puri Buch, senior general manager, ICICI Bank.

"We have been able to extend our reach through correspondence banking relationships with public sector banks like Corporation Bank and Indian Bank as well as private sector banks like Bank of Punjab," she said.

These banks are helping ICICI Bank on the back end in terms of moving money and in some cases, it is a two-way flow of information.

India Inc has become very demanding and wants banks to be there in every nook and corner. "Banks are far behind when it comes to opening branches in backward areas (areas which have been opened up by the government for investment and offer incentives)," said Ravi Venkateswar, heading finance at Godrej Sara Lee.

"We had problems in Guhati and had to deal with banks we never dealt with earlier. Similarly in Pondicherry, we faced problems till ICICI Bank took over Bank of Madurai," he added.

Corporate today find that it is not just infrastructure in terms of roads and power, but also things like banking, which affect their ability to expand.

"We being an FMCG (fast moving consumer goods) company, look for such opportunities, but are hampered by the lack of adequate banking facilities," said Venkateswar.

Many leading corporate entities are not too comfortable dealing with cooperative banks and gramin banks, said Ranjan Vaidya of Pidilite Industries.

"Real-time gross settlement (RTGS) covers just 2,500 branches. There is a need for seamless money transfer without any float," he added.

VSNL, which proposes to expand into remote areas, equally feels the urgent need for banks to move faster and offer seamless services across the various locations.

Cheque imaging will not resolve the problems of India Inc either, said Buch. "Ultimately it is the lack of connectivity. Bandwidth consumption is even higher in the case of imaging as opposed to sending of data," she added.

Many foreign banks are equally vying to enhance their presence in tier 2 and tier 3 cities where dealers and suppliers are located.

"There has been a paradigm shift in business opportunities," said the CEO of a leading foreign bank, which is looking at the subsidiary route. Foreign bank today continue to be hampered by legacy issue of restricted branch presence in the country.

Meanwhile, many of ICICI Bank's clients attending the half day seminar on "Integration of physical and financial supply chains", pointed to the need for regulators "" the likes of the Securities & Exchange Board of India (Sebi) and the Reserve Bank of India (RBI) "" to negate the sizeable float funds that are kept by banks.

Float funds are those that remain in the books of banks till such a time they are credited to the benefit of the issuer, or as in the case of a public equity offering, refunded to the investors.