Apex Bank Vsat Network By Early 1997

This was disclosed by W S Saraf, director, Institute for Development and Research in Banking Technology (IDRBT), Hyderabad yesterday. He was addressing the meeting of banks in the southern region at the Indian Overseas Bank, Madras.

Speaking at length on the advantages of having a VSAT system, Saraf said the network would be a `Closed user group' for banks and financial institutions. The master earth station will be located within the precincts of IDRBT. The setting up of the VSAT network will facilitate the establishment of a hi- tech environment and also provide a hub site for research and development programmes of the institute, he added

 

Elaborating on the system, he said it would help in improving customer services, the payments and settlements system. Citing examples, Saraf said that in the case of inter-branch reconciliation, there were complaints of delays, losses in transit and customer grievances. Verification of instruments after issuance, checking off-entries, matching and reconciliation will make the process of issue and payment of drafts, mail orders easier.

Another advantage of using the VSAT will be in the area of monitoring of deposits, advances, repayments and cash balances. This will allow for daily reporting on these key parameters, thereby protecting the bank from making large losses in case they are not able to watch these measures on a daily basis.

The VSAT also allows for centralisation of large corporate accounts which will enable the bank to keep a tab on the limit of exposure and shift from account- based banking to relationship banking.

That apart, the system would make it possible for banks to integrate their regional money markets and encourage better decision making at the banks' corporate headquarters, which normally makes the decisions regarding investment of funds. The MIS, Statistics and Statutory/Regulatory reporting will be enhanced when the new communication lines are operational and make information easily available to banks. All these will go a long way in reducing the hierarchical system followed by banks and make their structures flatter, Saraf said. Since the VSAT system provides for both voice and video communication, banks will be able to disperse their corporate divisions across the country saving on leasing and maintenance costs.

The system also cuts down on delay involved in the collection of data. This has happened in the case of returns on forex transactions, which could not be obtain the RBI in time.