Shri R.

Koteeswaran
CEO & Managing Director
Indian Overseas Bank
Central office
Chennai 600 002.
Dear Sir
A SUGGESTION: PRAXIS (THOUGHT AND ACTION)
Sub: Employees Resurgence Model (ERM) in pursuit of better
Customer Relationship Management (CRM) New Awakening Project
EMPLOYEES RESURGENCE MODEL PROJECT NEW AWAKENING
WHY THE NEED FOR RESURGENCE?
We wish that Indian Overseas Bank sets itself a vision for 2016 to be a pre-eminent
nationalized bank in India, with global presence. We should be a financial supermarket,
with leadership in identified spaces and a bank trusted by customers, shareholders,
employees and other stakeholders.
We have been successful in the past from a ranking of 32 in 2001 in Business Line
survey we reached a position of best public sector bank in 1997 and then slipped to 3 in
2007 and ranked as 12 in 2014 and have gone down considerably to number 14 positions
in 2015.
However, the market is changing the strategies we have successfully adopted in the past
will not allow us to continue on this growth path. The retail asset segment is growing
exponentially, customers are getting younger, technology is transforming the way banks
do business and new, more aggressive competitors are gaining market share.
This has four implications for everyone in the Bank:

We need to grow faster at least 35 40% per year

We need to reconfigure our business models to adjust to new market realities
Everyone needs to share and contribute to the Banks vision
We need to challenge mindsets and prove to ourselves that we can change

What is ERM- PROJECT NEW AWAKENING?

ERM for better CRM (Customer Relationship Management)
Project NEW AWAKENING ERM is a large-scale transformation to be undertaken by
the Bank in consultation with the union/officer association. It has been designed to
empower the field through synchronized efforts on multiple fronts:

Back-Office centralization of branch processes

New marketing and sales initiatives (supported by product suite evaluation)
Best in class branch sales and service
Centralized loan processing (for faster turnaround and enhanced NPA
management)
Organization design along key business areas (retail assets, retail banking and
SME)
Strong branding (in collaboration with Mudra, etc.) to complement the sales force
IT initiatives to support the business roll out of CBS, procurement of Lead
Management System and development of Lending Automation System
Concerted efforts to enhance growth in rural and agri business no frill SB
accounts, doorstep banking, establishment of Village Knowledge Centres, products
to help farmers like debt swapping and post harvest finance.

I have designed these efforts organized along four initiatives and centers of excellence
mentioned below:

1. Retail Assets marketing and processing Branches: Several point-of-sale initiatives

will be undertaken to increase the retail asset growth rate-builder tie-ups, vehicle dealer
tie-ups, stalls and carpet marketing. These will be supported by an efficient back office at
the Retail Asset Branch (RAB), which will ensure that in-principle sanction is
communicated within 3 days of receiving the lead (through partnership with agencies).
2. SME marketing and processing) Reputed Branches: SME marketing initiatives
will focus on marketing the whole suite of products credit, current accounts and feebased products. The initiatives will generate leads through customer referrals / cross
selling and carpet marketing in industrial estates and markets. There will be an efficient
processing engine in the form of an SME CPC, which will process all proposals above
the delegated authority of the branch manager.

3. Branch sales and service Branches (retail branches):

Set up of Privilege accounts Accounts with balance > Rs. 1 lakh (SB)
and Rs.2 lakh (CD) need to be given special treatment in branches (separate
enclosures, different account kits, etc.) to ensure that this valuable base
remains with the bank.
Improvement of ambience through fixing functional aspects.
Migration of low value transactions to ATMs and encouraging usage of
drop boxes this would reduce crowding in branches and release staff time.
Customer data updation to meet KYC norms and provide leads for
marketing.
Continuous Training of clerical and substaff staff in key behavioral
attributes for better customer experience.
Encouraging cross-sell through all branch staff, contributing to business
generation.
4. Centralization (Service branches national, regional, district): Centralization of
key processes like preparation of returns, statements, account opening and chequebook
issuance etc. will significantly free up branch staff. On average, 5-10% of staff will be
released from branches, which will be divided between service branch and marketing
efforts.
HOW IS IT GOING TO BE IMPLEMENTED?
The programme has been designed as a field programme, running out of regions and
branches. There will be a phase-wise rollout across the Bank starting with
implementation at mega, metro cities and rapidly encompassing the whole bank.
For this purpose, the bank has to release around 100 full time clerical staff (called
coaches) to work in each of these centers with a mandate to absorb and implement best
practices. These coaches will implement best practices by working at the select branches,
taking the branch staff along with them. Subsequently, they will go to other branches
where they will be joined by coaches from the next wave of regions, thereby percolating
these best practices throughout the bank.

BENEFITS AND KEY ACTION STEPS

How is it going to benefit branches?
More resources
1. Centralization leads to about 5-10% spare staff for sales and marketing
2. Automatic generation of MIS centrally over time
More efficient resources
1. CRM trained in structured sales and customer service activity
2. Specialization (processing, back office)
3. Up-to-date customer information (address, telephone number, e-mail
address)
More productive resources
1. All branch staff participate in business generation
2. Re-skilling of branch staff
3. Structured sales catchment area analysis, outbound sales, salary accounts
Delighted customers
1.
2.
3.
4.
5.
6.

Dedicated relationship management for NRIs

Personalized cheque books
Better service experience and branch ambience shorter queues
Faster turnaround time (retail and SME loans)
Doorstep service for retail loans
Convenience of technology products ATMs, e-banking.

What will we do differently?

Fortnightly branch staff meeting on branch performance and product knowledge

Dedicated CRM
Daily review of lead generation and conversion
Weekly outbound sales planning with marketing staff
Forward leads to RABs; welcome leads from all staff
Accept the teething troubles of back office processing
Allocate all important customers to branch officers/ coaches as first points of
contact

BRANCH STAFF BENEFITS AND KEY ACTION STEPS

How is it going to benefit branch staff?
Reduction in workload
Centralization, increase in ATM, e-banking usage

Better work environment

Better ambience basic facilities (Air-conditioning of branches should be
delinked with present archaic business mix norms)
More space (back office centralized)
Updated customer information
Match between skills and role
Skill upgradation and training of clerical and sub staff in sales & marketing,
customer service
Structured methodologies and tools lead management system
Thrill of business generation
Direct contribution to Banks bottom-line
What will we do differently?
Initiate conversations with customers at every opportunity (1. Take feedback. 2.
Generate leads)
Tell customers about ERM AND NEW AWAKENING PROJECT
Learn about all products of the Bank
Experience all technology products of the Bank open e-banking accounts, obtain
ATM cards.
OBJECT AND MISSION OF ERM:
The object and mission of ERM is to make Indian Overseas Bank

the eminent nationalized bank in India, with global

presence
a financial supermarket, with leadership in identified
spaces
4.
5.
6.
7.

a bank where customers come first

a top creator of shareholder wealth through focus on profitable growth
a young organization leveraging its experienced workforce
the most trusted brand, admired by all stakeholders
a socially responsible organization known for best corporate governance

.
GROUND REALIITES AND TASKS AHEAD
However, market dynamics are changing, Size of market doubling every 4-5 years
Indian banking is witnessing a historic transformation through the resurgence of
retail markets.
- The retail segment is expected to account for 50% of the market by 2015
- Note: A RBI data has ranked our Bank as 9 in 1979 while granting ranking by
total assets in 2007. The same data has ranked us 12 in according ranking by total
assets in 2007 and in July 2015 we had moved forward to number10
This retail growth is driven by a changing demographic profile and increased
banking penetration
- Customers are getting younger
- By 2009 10, it is stated additional 40 million households have started banking. On
April 17, 2013 the newspaper The Hindu carried new item titled India is set to become
the youngest country by 2020.The report states the population in the age-group of 15-34
increased from 353 million in 2001 to 430 million in 2011. Current predictions suggest a
steady increase in the youth population to 464 million by 2021 and finally a decline to
458 million by 2026. By 2020, India is set to become the worlds youngest country with
64 per cent of its population in the working age group. With the West, Japan and even
China aging, this demographic potential offers India and its growing economy an
unprecedented edge that economists believe could add a significant 2 per cent to the GDP
growth rate.
A BCG report of 2012 how a billion plus consume states the share of nuclear
households has risen from 61% in 2006 to 66% in 2010. The per capita spending of
nuclear families is 20 to 50% higher than traditional joint families in the same household
income group. due to liberalisation the young population have witnessed firsthand
opening of markets influx of foreign goods and have different beliefs and have made

different choices from their parents , they believe in living in present and have higher
propensity to spend By 2010 it is expected 75% of the Indian population will be of this
generation category . These fundamental forces will drive explosive consumption growth
in the next decade. Their spending on consumer durables alone accounts for 20% to total
consumption. their expenses on food , consumer durables and housing is 65% of the total
consumption in2020 .the report states Indias expenditure on consumer and housing
segment is likely to grow exponentially from 185billion US$ to 750billion US$ nearly 4
times .

This growth story has three major implications for banks

- Increased number of point of- sale transactions
- Young customers use multiple channels like Internet Banking, phone banking and ATM
- Enhanced use of technology in all aspects of the bank.
There is fierce competition in the market - Competitors, especially new private
sector banks, are gaining market share
- At current growth rates, the new private sector banks will be more than one-third of the
market
by 2012
Private sector banks are gaining market share across profitable products (CASA
and lending)
- Private banks savings deposit share has more than doubled from 2000 to 2006 (6%
to 13%)
- They have become market leaders in retail lending starting from scratch
- They are enhancing their SME presence through product bundling, and assured
turnaround
time.
The sectors growth potential is attracting new, unconventional competition
-

Companies like Future Group, GE are establishing a presence in retail lending

3rd party distribution is increasing through companies like Geojit, India infoline, etc.

Note: largest market share loss for nationalized banks has been in highly profitable
products with gain in low margin products like fixed deposits. Hence to combat these
external changes and internal hurdles, there is a need for rapid and discontinuous
improvement in performance. We have to redesign IOB aircraft while flying. It is in
this context we have presented this paper on ERM. In short we have planned for a
Bank within a Bank with branches to concentrate on marketing, customer service,
select operations and back office branches to perform account opening, chequebooks,
account statement printing etc.

KEY INITIATIVES OF ERM

1. Retail assets:

Point of sale marketing along with walk in

Alliances & partnerships
Competitive schemes
Centralized processing
Retail Asset Branch

2. SME:

Feet on street to generate leads

Competitive schemes in SME credit, current accounts, cash management
Centralized processing
Assured TAT (turn around time)

3. Branch sales and service (SB Customer service):

CRM for best service to valuable customers
Galvanize all branch staff to cross sell
Direct sales force in branch catchments

 Assured service on key dimensions

Retail branches
4. Centralization:
Centralize branch back office to service branches (eg. account opening,
upgradation of inoperative accounts, arresting slippages in both deposits and
advances etc).
Free up branch space time, resources for customer service and sales
Centralized back offices (National, regional, district)
CONCERTED INITIATIVES IN RURAL AND AGRI BUSINESS:
If the misery of the poor be caused not by the laws of nature, but by our institutions,
great is our sin.
- Charles Darwin
The current sensex index is at an all time high but 65% of Indian
households do not have bank account (in rural India, that is 70%
according to the Census of India household survey in2004).
Another NSSO 59th Round Survey Results states

51.4% of farmer households are financially excluded from both formal/

informal sources.

Of the total farmer households, only 27% access formal sources of credit; one
third of this group also borrowed from non-formal sources.

Overall, 73% of farmer households have no access to formal sources of credit.

Across regions, financial exclusion is more acute in Central, Eastern and

North-Eastern regions. All three regions together accounted for 64% of all
financially excluded farmer households in the country. Overall indebtedness to
formal sources of finance of these three regions accounted for only 19.66
Several initiatives are suggested to ensure business growth such as

Opening of no-frill SB accounts

Doorstep banking through business facilitators and business correspondents using
biometric smart cards (select rural and urban branches say about 1000)
Establishment of Village Knowledge Centres, a pioneer product across banks
Technical information on crops, climate and farming policies
Increased price realization through price knowledge across mandis
Establishment of farmers clubs for co-operation in procurement & farming
Enhanced awareness grahak mitra customer advisory and relation clerks free
financial counseling
Developing self-sufficiency through SHGs, NGOs, etc. (each1000 branches if
identifies 10 new target villages we will reach the target of 10000)

Customized asset products

Post-harvest finance to avoid distress sales financing against warehouse receipts
Debt swapping for farmers with loans from money lenders
Gold loans to farmers / agriculturists. ( if each of the 10000 villages brings 250
new customers we will reach the target of 25000 new customers)

I T INIITIATIVES
The following supporting IT initiatives are to be implemented
Roll out of Core Banking Solution to some more branches
Lending Automation Solution being developed for enhanced control and efficiency
in proposal processing.
Centralized MIS

 Generation of statistical / MIS returns to be automated through Finacle

MIS department at Central Office to be responsible for generation
Procurement of comprehensive Lead Management System
RFP in process
Mobile banking being implemented with features like customer alerts, balance and
transaction enquiry. Simplification of Internet banking activation process and
increased Internet banking facility.
NEW STRUCTURES
This New business model requires new structure and systems
New structure is to be rolled out in FGM Offices and RO
FGM Offices as centers of excellence; RO focused on business generation
Segmentation of branches (retail, retail asset, SME, rural & agri)
RAB to undertake retail lending
Branch leads and independent lead generation
PMO (Principal marketing officer) to be the key person co-ordinating direct retail
sales effort .He should be assisted by a core team of marketing and sales clerks.

Dedicated deposit sales force in branch catchment area

Retail loan sales force in RAB
Independent 3rd party sales force
Salary account sales to SME and corporate customers
Formation of core team: the core team should consist of fully dedicated change
agents. Initially form core team of 100 coaches in each metro and mega/metro
centres and over a period spread it to access all key potential centres. Intensive

training programmes be planned to these coaches. Implement change in field

centre by centre.
SME branches to have dedicated SME marketing officers/clerks
SME, CPC to provide oversight for sales; centralized processing of loan above
branch powers
All staff in the branches to undertake cross selling
Generate new leads from the walk in traffic
Specific individuals in branches to convert the leads

CORE TEAM OF COACHES - KEY INITIATIVES

1. Retail asset coaches
Marketing

Builder tie-ups
3rd party lead referral agencies
Carpet marketing
Stalls
Branch leads
Lead management, MIS

Back office

Turnaround time
Sales force management
Monitoring & recovery set-up
MIS

2. Branch sales & service coaches

Privilege accounts
For top priority customers
Service enhancement

Ambience
ATM migration
Customer data updation
Cheque drop box
MIS

Outbound sales

Catchments area analysis

Stalls
Door-to-door marketing
MIS

Cross-sell
Relationship managers, mobiles to marketing and sales officers/clerks
Various products CASA, Debit cards, Retail loans, NID
Lead management, MIS
Salary accounts
3. SME coaches
Marketing
Relationship manager / account planning should coordinate with team of
marketing and sales clerks
Channel finance, salary accounts

 Outbound sales: catchment area analysis, carpet marketing, industry / other

associations
Lead management, MIS
Back office

CPC
Turnaround time for SME proposals
Ambience (for branch)
MIS

STRUCTURED TOOL KITS FOR SALES AND MARKETING AND PROCESSING:

Builder Tie Up (tie up with honest builders)

Stalls (road shows)
Door to door marketing
Introduction of structured methodology for Lead Conversion System ,
Central Processing

Note: LMS (LEAD MANAGEMENT SYSTEM)

1. LMS will enable more efficient lead conversion. It will ensure End to end tracking of
every lead. It will facilitate CRM in charge of managing these leads in regions and
branch managers to review lead data base every morning and decide action plan to
convert /generate leads. It will augment effective hands offs between lead generators
and converters. Many sources of lead generation (branch frontline staff will provide the
lead to product in charges (CRMs, advance officers etc.).This in turn will generate
automatic MIS generation augmenting success ratio of various initiatives.
2. CENTRAL PROCESSING: will ensure assured turn around time (TAT), Better Risk
Management And Lower NPAs and Augment Specialization And continuous Skill
Development
HOW WILL EMPLOYEES SUPPORT ERM?

Personally participate in selling

Commit to resolve our problems and issues
Adopt a branch
Personally respond on e-mail

CONCLUSION:
In the history of every company, there is at least one point when one has to change
dramatically rise to the next level. To set ourselves ambitious goals and to reach them, we
need an equally ambitious transformation programme. We are confident that a bank of
our size and capability united behind the banner of Employees Resurgence Model and
Project New Awakening can achieve wonders and propel us to the position we aspire.
All IOBIANS past and present and our dedicated customers who have grown with the
bank wants IOB to grow into a vibrant and robust financial service provider. The time has
come to invest some efforts in making this aspiration a reality.iobains have shown
tremendous resilience in the past. Hence I am confident that this programme has the full
commitment of our members. . Equally I am confident our belief in ourselves to change
will become more effective. I sure that top management will welcome these suggestions
and hold discussions with the union and officer association , share support, participation
and enjoyment in transforming our bank.
Over the next few months, we look forward to the bank for exchange of views about this
paper suggested by us as it unfolds and resolution of our demands on empowerment,
recruitments etc.

Yours faithfully

S.SRINIVASAN

Retired bank unionist

& Former Director of IOB
24-07-2015
ambujchinu@gmail.com