A project report on

Implementation of B.P.R. in Bank Of India

Submitted to: Submitted by:

S.N. Nandi RAHUL SHUKLA(20090203)
DIWAKAR PANDEY(2009017 )
VINOD PANCHAL (200902 )
Preteek gupta(20090197)

Sec-B
Introduction:

Business Process Reengineering is the analysis and design of workflows

and processes within and between organizations. A business process is a
set of logically related tasks performed to achieve a defined business
outcome. Re-engineering is the basis for many recent developments in
management. The cross-functional team, for example, has become
popular because of the desire to re-engineer separate functional tasks
into complete cross-functional processes. Also, many recent
management information systems developments aim to integrate a wide
number of business functions. Enterprise resource planning, supply
chain management, knowledge management systems, groupware and
collaborative systems, Human Resource Management
Systems and customer relationship management systems all owe a debt
to re-engineering theory.
Bank of India was founded on 7th September, 1906 by a group of
eminent businessmen from Mumbai. The Bank was under private
ownership and control till July 1969 when it was nationalized along with
13 other banks.
Company Profile:
Bank of India is an established commercial banks with a pan-Indian
presence and is a century old having been founded on 7th September
1906.The Bank is rated as one of the top five banks in the country, with
over 2,650 branches across India and 23 foreign branches or offices with
an asset base of over $26 billion. Corporate credit, trade finance, loan
syndication, export finance, forex operations and all types of retail
banking are its forte.

The bank was the first Indian financial institution to open its branches in
London in 1946. After
World War II, it opened a branch in Tokyo, Japan on May 17, 1950.
Soon after this the Osaka branch was established on 20th October 1950.
With fifty-three years of experience in global banking it has strong
assets and correspondent relations with leading international banks. The
bank believes in a total package approach to meet all financial and non-
financial requirements of its customers.
Beginning with one office in Mumbai, with a paid-up capital of Rs.50
lakh and 50 employees, the Bank has made a rapid growth over the
years and blossomed into a mighty institution with a strong national
presence and sizable international operations. In business volume, the
Bank occupies a premier position among the nationalized banks.
The Bank has 3101 branches in India spread over all states/ union
territories including 141 specialized branches. These branches are
controlled through 48 Zonal Offices. There are 29 branches/ offices
(including three representative offices) abroad.
The Bank came out with its maiden public issue in 1997 and follow on
Qualified Institutions
Placement in February 2008. . Total number of shareholders as on
30/09/2009 is 2, 15,790.
While firmly adhering to a policy of prudence and caution, the Bank has
been in the forefront of introducing various innovative services and
systems. Business has been conducted with the successful blend of
traditional values and ethics and the most modern infrastructure. The
Bank has been the first among the nationalized banks to establish a fully
computerized branch and ATM facility at the Mahalaxmi Branch at
Mumbai way back in 1989. The Bank is also a Founder Member of
SWIFT in India. It pioneered the introduction of the Health Code
System in 1982, for evaluating/ rating its credit portfolio.
The Bank's association with the capital market goes back to 1921 when
it entered into an agreement with the Bombay Stock Exchange (BSE) to
manage the BSE Clearing House. It is an association that has blossomed
into a joint venture with BSE, called the BOI Shareholding Ltd. to
extend depository services to the stock broking community. Bank of
India was the first Indian
Bank to open a branch outside the country, at London, in 1946, and also
the first to open a branch in Europe, Paris in 1974. The Bank has sizable
presence abroad, with a network of 29 branches (including five
representative offices) at key banking and financial centres viz. London,
New York, Paris, Tokyo, Hong-Kong and Singapore. The international
business accounts for around 17.82% of Bank's total business.

Reason for BPR Initiative:

• For faster work

• Regulations of RBI and other banks
• For secure data transfer
• For making banking very easy for a retail as well as corporate
customer

Scope and Time Frame:

Scope:

There was a huge scope when Bank of India went for Business Process
Reengineering (BPR) because all the banks were competing against each
other and RBI was bringing about a major change in the banking system
by introducing the core banking solution.
Being in India’s banking sector, Bank of India has the responsibility of
serving its customers with adequate security. Like most leading banks, it
has taken all possible actions to beef up its IT infrastructure and security
set-up. It has taken care of all the areas in the organization, which are
critical from a security standpoint. Technologies such as biometrics and
encryption are in use. Conducting regular drills at its data recovery site
and successfully recovering most of the IT system instantaneously after
a simulated disaster. Bank of India looks like a bank which never stops
working regardless of the scale of the catastrophic event that it may face.
This bank has much more to offer to its customers while it guns for a
ISO 27001 certification.
Time Frame:

From year 2000 when TCS Bancs was used for Total Branch
Automation, Infosys brought up Finacle which was a Core Banking
Solution for all the banks in India. So BPR was implemented by Bank of
India since 2000 and changed it a lot and still changing by introducing
new services.

Team Involved:

Seven consultants, including Ernst &Young, Boston Consulting Group

(BCG) and McKinsey have expressed interest to take up job of
evaluation and restructuring of the organizational set up of the bank. The
Boston Consulting Group assisted Bank of India. The bank short-listed
the consultants and its board of directors would soon take a decision on
the matter in its next meeting. The bank would recruit 3295 employees
which would include 2250 officers in various departments like
agriculture, statistics, and marketing among others. The bank has
obtained the approval for opening a subsidiary branch in New Zealand
and this is going to be launched soon.
It has also applied for opening a branch in Canada. As a measure
towards financial inclusion, the bank has opened 40 lakh no-frills
accounts and issued 1 lakh bio-metric cards. In Orissa five more
branches were proposed to be opened by March this year taking the total
to 134. This would further be increased to 150 by September and all the
districts would be covered in the next 2-3 years. The bank has a business
of Rs 5250 crore with a branch network of 129 in Orissa.

Project Design:

The public sector Bank of India (BoI), which targets to take its business
to about Rs 12 lakh
crore in next 5-6 years, mulls to implement Business Process Re-
engineering (BPR) initiates to streamline its growing business.
The board has in principle decided to adopt the BPR initiative to face
competition. The evaluation of the proposals is going on and a decision
is going to be taken in the next board meeting of the bank.
The bank has a branch network of 3159 at present. This would have to
be increased to about 5000-7000 over the next five years.
To meet the credit need of the corporate sector and help in faster
decision making on the loans, the bank would set up one corporate
branch in every state. Accordingly, a corporate branch of the bank
would come up in Bhubaneswar soon. The bank would recruit 3295
employees which would include 2250 officers in various departments
like agriculture, statistics, and marketing among others.

Supporting Tools and Techniques:

Core Banking Solution

Core banking is a general term used to describe the services provided by

a group of networked bank branches. Bank customers may access their
funds and other simple transactions from any of the member branch
offices.
Core means "Basic", hence the basic services provided by the inter-
networked branches of bank is called "Core Banking". Core Banking is
normally defined as the business conducted by a banking institution with
its retail and small business customers. Many banks treat the retail
customers as their core banking customers, and have a separate line of
business to manage small businesses. Larger businesses are managed via
the Corporate Banking division of the institution. Core banking basically
is depositing and lending of money.

Nowadays, most banks use core banking applications to support their

operations where CORE stands for "Centralized Online Real-time
Exchange". This basically means that all the bank branches access
applications from centralized datacenters. This means that the deposits
made are reflected immediately on the bank's servers and the customer
can withdraw the deposited money from any of the bank's branches
throughout the world.
These applications now also have the capability to address the needs of
corporate customers, providing a comprehensive banking solution. A
few decades ago it used to take at least a day for a transaction to reflect
in the account because each branch had their local servers, and the data
from the server in each branch was sent in a batch to the servers in the
datacenter only at the end of the day (EoD).
Normal core banking functions will include deposit accounts, loans,
mortgages and payments. Banks make these services available across
multiple channels like ATMs, Internet banking, and branches.
Core Banking solutions are banking applications on a platform enabling
a phased, strategic approach that lets people improve operations, reduce
costs, and prepare for growth. Implementing a modular, component-
based enterprise solution ensures strong integration with your existing
technologies. An overall service-oriented-architecture (SOA) helps
banks reduce the risk that can result from multiple data entries and out-
of-date information, increase management approval, and avoid the
potential disruption to business caused by replacing entire systems.
Core Banking Solutions is new jargon frequently used in banking
circles. The advancement in technology, especially internet and
information technology has led to new ways of doing business in
banking. These technologies have cut down time, working
simultaneously on different issues and increasing efficiency. The
platform where communication technology and information technology
are merged to suit core needs of banking is known as Core Banking
Solutions. Here, computer software is developed to perform core
operations of banking like recording of transactions, passbook
maintenance, and interest calculations on loans and deposits, customer
records, balance of payments and withdrawal. This software is installed
at different branches of bank and then interconnected by means of
communication lines like telephones, satellite, internet etc. It allows the
user (customers) to operate accounts from any branch if it has installed
core banking solutions. This new platform has changed the way banks
are working.
Gartner defines a core banking system as a back-end system that
processes daily banking transactions, and posts updates to accounts and
other financial records. Core banking systems typically include deposit,
loan and credit-processing capabilities, with interfaces to general ledger
systems and reporting tools. Strategic spending on these systems is
based on a combination of service-oriented architecture and supporting
technologies that create extensible, agile architectures.

Processes

The top priority in the bank’s security policy is that its operations should
be carried out in a secure and safe manner and that accessibility to the
people in the organization as well as those outside should be provided in
a secure and controlled way. For evaluating the state of the system,
auditing is performed annually across branches.
The bank follows processes such as information profiling which
involves classification of information into categories, such as, secret,
confidential, corporate confidential, offices and public. Every new
process is scanned for its risks and vulnerabilities and various other
security clearance aspects. Only after it has been cleared by both the
teams, it can go ahead and become the part of the organization’s
business.

Systems

Bank of India has all the security related software and hardware like
anti-virus, spam filters, firewalls, content filters, storage security
installed and implemented. Using all these tools they seem to have a
stable organizational security structure. The bank uses all possible
vulnerability tools to ensure that its infrastructure is not vulnerable to
external attack. It uses biometrics at all critical installations for
authentication and encryption is used across the board. A team of 10-15
security specialists at the head office takes care of the important tasks.
Apart from the core team, a team of about 150 people is taking care of
security across branches.

Certifications

Bank of India is the first Indian bank to open a branch in London, a task
it accomplished way back in 1946. It is rated as one of the top five banks
in India with more than 2,650 branches in the country and 23 abroad
with an asset base of over $26 billion
As far as certifications are concerned, Bank of India complies with RBI
regulations and IT Act 2000. Bank of India is also in a process of getting
ISO 27001certification. IDRBT Hyderabad handed the best bank for
information security policy and practices award to Bank of India.

Outsourcing

The entire IT infrastructure management has been outsourced. Core

banking is outsourced and managed by HP. The ATM systems are
handled by eFunds.

DR/BC Disaster Recovery and Business Continuity) set-up

The BoI data centre set-up is located in Mumbai and forms the tier-one.
The tier-two setup, the disaster recovery centre, is based in Bangalore
and is in a different seismic zone.
The connectivity between these two centres and across branches is
established by means of dedicated leased lines that have been leased
from MTNL, BSNL and Bharti Enterprise.
Branch links terminate at Network Aggregation Points (NAPs) that are
simultaneously connected to the BoI data centre in Mumbai and DR
centre at Bangalore. The interconnectivity is established based on point-
to-point protocol using leased lines. Data travels through multiple leased
lines from the data centre to the disaster recovery centre. The core
banking applications run on Finacle from Infosys and the database is set
up using the Oracle Financial Service Architecture.
The core banking applications run on multiple HP Superdome servers
while the storage solutions have been migrated to a HP StorageWorks
XP1024 disk array. This is further connected through leased lines to
various Cisco switches and routers deployed across the country with the
branches forming a hub and spoke topology that uses a central point to
co-ordinate activities between various branches and the data centre.
At present, the operations at about 2,433 branches across the country are
computerized out of which 108 operate in a partially-computerized
mode. The bank is a member of the RBI’s VSAT Network and has
installed about 39 VSATs linking strategic branches and offices adding
redundancy during disaster.

Data Recovery

Bank of India has a data recovery site located at a different seismic zone
from its primary site. The secondary site is a hot site that is almost
identical to the primary one. Bank of India can recover its entire core-
banking setup almost instantaneously. It periodically conducts drills at
the DR site.
Bank of India (BoI) has started a business process re-engineering (BPR)
exercise, encompassing centralization of operations not requiring
customer interface, restructuring of the organization in view of changing
business requirements, and putting branches on the core banking
solution platform. Bank of India has completed work on product
portfolio review (PPR), and small and medium enterprises (SME)
strategy. Now bank is focusing on the last module – BPR. The Boston
Consulting Group is assisting Bank of India in this exercise.

The solutions deployed

If the new infrastructure was not put in place, it would have jeopardized
its productivity and revenues. Moreover, migration from the existing
facility to the new one was dependent on the network implementation.
The facilities in India are connected by multiple MPLS circuits. These
circuits are on the Trans-Atlantic and Trans-Pacific communication
cables routed from United States to the facilities in Bangalore and
Hyderabad. The Trans-Oceanic communication cable lines are handled
by MCI and AT&T.
The network also supports automatic re-routing and inter-connected
operations for the facilities in Bangalore and Hyderabad.
The network’s DR objectives were achieved through the use of
redundant network equipment and communication links. The
deployment complemented First Indian to achieve its expected link
uptime of 99.99 percent for various international transactions and
business processes.

Technology used

The switching facilities included Cisco Catalyst 6506-E for core

switches. Cisco’s Catalyst 6513 and 6509 were deployed as access
switches while Catalyst 4506 forms a Demilitarized Zone. The access
layer switches helped First Indian harden its system. The server farm
switches were Cisco Catalyst 6509. Internet and WAN routing was
accomplished through Cisco 3825 series routers. Security was framed
and designed with flexibility for future needs and control that could be
handled at the access or core layers. The enterprise security aspect is
covered using Cisco’s PIX-535-UR-BUN and PIX-535-FO-BUN
firewalls with failover.
Remote connectivity was established through VPN Concentrators
through the use of Cisco VPN 3030. Network administrators can enforce
corporate assigned policies through Cisco Secure Access Control
Server.

Benefits

It took three months to complete the deployment. During that time the
IP Contact Centre routed the calls from corporate global centres in the
United States and across Asia and India. It is now being routed by the
Cisco Unified Intelligent Contact Management. The main management
of call centres is in United States while the calls are being handled by
customer care representatives in Bangalore on various Cisco 7960 IP-
based phones.

Future expansion

First Indian handles 800 terabytes of data and this is expected to expand
with the business growth. This has led the company to spread its
operational wings to other locations.
First Indian is looking to set up its base in other Indian cities as well.
This will also mean further extension of its network architecture.

Automated against disaster

The Bank of India wanted to migrate to a system that would automate

all its branches across the country. The bank also needed to introduce a
core banking system and centralized data system since the data access in
each branch was limited to city level servers. This was why BoI decided
to shift from branch-specific automation to an overall bank automation
along with business continuity and disaster recovery implementation,
according to P A Kalyan Sunder, GM, IT.
BoI currently has more than 2,000 branches across the country. Out of
these 1,000 are considered as strategic branches. To fulfill its
deployment objectives BoI chose HP as consultants and network
integrators for the project.

Solution and Technologies Deployed

The higher level management decided to tackle change management

issues with determination and by ensuring continuous training to its
employees. The training on various banking technologies and business
aspects was jointly executed by BoI and HP.
The BoI data centre set-up is located in Mumbai and forms the tier-one.
The tier-two set-up forms the disaster recovery centre and is based in
Bangalore. The DR centre lies in a different seismic zone. The
connectivity between them and across various branches is established
with dedicated leased lines. These lines are leased out from MTNL,
BSNL and Bharti Enterprise.
Branches from across the country terminate at various Network
Aggregation Points (NAPs). The NAPs are simultaneously connected to
the BoI data centre in Mumbai and DR centre in Bangalore. The inter-
connectivity is established based on point-to-point protocol using leased
lines. Data travels through multiple leased lines from the data centre to
the disaster recovery centre. The core banking applications run on
Finacle from Infosys and the database is set up upon Oracle Financial
Service Architecture. The entire core banking applications run on
multiple HP Superdome servers while the storage solutions have been
migrated to a HP Storage Works XP1024 disk array.
This is further connected through leased lines to various Cisco switches
and routers deployed across the country in various branches forming a
hub and spoke topology. This topology uses a central point to co-
ordinate activities between the various branches and the data centre.
Apart from project management, HP also holds the responsibility of
managing the bank’s infrastructure which includes mainframes, Web
and data servers, network devices and desktops. The responsibilities also
include upgrading the applications and the software for core banking
applications, telephone banking and Internet banking. The deployment
and implementation leaves enough room for future increase in customer
base and up gradation of deployed systems and network.

The benefits

The IT deployment and transformations in core banking and data

warehousing have helped BoI to reduce its Total Cost of Ownership.
The deployment has almost achieved its prime objectives of shifting
from branch-centric automation to bank automation without
compromising on disaster recovery and business continuity processes
The deployment has complemented BoI to update its database through
data mirroring and remote auto backups. Management Information
System and various critical functions of controlling offices have been
computerized.
At present, the operations at about 2,433 branches across the country are
computerized out of which 108 branches operate in partially-
computerized mode. The bank is a member of the RBI’s VSAT Network
and has installed about 39 VSATs linking strategic branches and offices
adding redundancy during disaster. The IT deployment and
transformations in core banking and data warehousing have helped BoI
to reduce its Total Cost of Ownership. The deployment has almost
achieved its prime objectives of shifting from branch-centric automation
to bank automation without compromising on disaster recovery and
business continuity processes.

Future plans
The core banking application is deployed in 1,000 branches currently. It
will deploy at all the branches across the country, eventually. BoI is also
planning to introduce online cheque truncation facility for its customers.
Cheque truncation is the use of electronic (scanned) images of a cheque
for processing. This should further scale up the IT infrastructure and
operations at the bank.

Impact of the project “as is: and "to be":

• The Bank of India has successfully implemented the core banking
solution in all branches. They are using Finacle of Infosys and
carrying out their operations very fast and customers are happy
with the quick service of the bank
• The technological advancement has the changed the working of
Bank of India totally but still the human resource i.e. employees
need to be more updated than before to provide a better service.
• Infosys introduced Finacle which changed the way of working for
banks. Now, account opening is done on the same day in Bank of
India. If compared to earlier, it took one week at least.
 • Not only technology helped Bank of India to implement BPR but
their fast working and updated manpower also gave them edge
over other banks. Now, all documents reach within one week or
two which took too much time earlier.
• Now Bank of India has implemented Internet Banking (more
secure), WAP(Wireless Application Protocol) Banking,
SMS(Short Message Service) Banking with no extra cost to the
customer

• One can open an account with Rs. 100 (without cheque book) and
Rs. 500 (with cheque book)
Now, forms can be downloaded from the website itself and a virtual
keyboard is present on the login site (in case of internet banking) to
avoid hijacking of passwords.

Conclusion and Recommendations:

Bank of India has successfully implemented Business Process

Reengineering over a period of
time to satisfy the today’s customer needs and enhance the business
process in a better manner.
Bank of India is now earning a great goodwill among the customers
(retail and corporate) due to
its great services. However, there are still some recommendations for the
bank:

• Bank of India should try to implement a better way of working

which can help a common man. Today, a common man faces too
much problem in opening a bank account.
• With the help of UIDAI (Unique Identification Authority of India)
the bank can try to link everything in a centralized manner.
However, UIDAI is planning the same.
 • Internet education should be imparted to the common citizens so
that they can learn the benefits of technology which can save time
and money.

• Though BPR is being implemented yet Bank of India being a

public sector bank is facing tough competition from private banks
like ICICI Bank, Axis Bank due to certain discrepancies. It should
try to improve its image over other banks whether public or
private.

Bibliography:
Business process change: reengineering concepts, methods, and
technologies By Varun Grover,
William J. Kettinger
 http://www.business-standard.com
 http://www.banknetindia.com
 http://www.financialexpress.com