PSU Banking 2.0: Merge & Surge

Reported by: |Updated: October 3, 2020

Banking Frontiers organized a web panel discussion with senior executives of public sector banks on the themes of amalgamation and lockdown. A report:

An idea of a community cloud exclusively for banks was mooted at a web panel discussion highlighting such a facility will go a long way in handling issues like security, cost, and exclusivity, which banks face while using a public cloud. Making the proposal, Rajesh Ram, General Manager-IT, Bank of India, pointed out that major banks have their own private cloud, while there are restrictions of a public cloud.

“Why not all banks come together and develop a community cloud for their exclusive use and also offer spare capacity to smaller cooperative banks, who cannot afford to be participants in the effort,” he said, participating in a web panel discussion on the theme of amalgamation of public sector banks and the impact of lockdown on banks, organized by Banking Frontiers.

He pointed out that globally, prices for public clouds are going up.

He also said the regulator has now come out with a sandbox for innovative technologies to be tested and refined and the idea of a community cloud for banks can be part of the experimentation under the sandbox, Rajesh Ram said adding if the idea does not work, the concept of a private cloud can continue.


Suryanarayanan K., CISO at Central Bank of India, said the bank is planning to explore cloud for certain applications. “The main challenge earlier was data storage as the providers were outside India. Now the situation has changed and most data centers are present in India. We want freedom to leave one cloud and to move to another cloud even while ensuring security for the data,” he said.

Prasanna Ranade, Head – BFSI, Dell Technologies, who participated in the discussions, said Dell believes in operating model and as long as an enterprise has the control over its infrastructure, it can be anywhere – public cloud or private cloud. “A recent survey by Dell shows that public cloud is bound to flourish. Banks should have a common framework to manage infra and cloud. This is happening in PSU banks,” he said.


Subramanian, GM-IT at IDBI Bank, believes that public cloud needs more visibility and transparency. “Since the servers, networks, etc, will be shared in the cloud, we need more control. All the banks are running full-fledged data centers and while going to cloud, we have to get benefits,” says he.

Discussing the broader point of lockdown and its impact, Ratan Kumar, General Manager – IT, Central Bank of India, said the pandemic has thrown challenges and opportunities. Interaction at branches was the strength of banks and now it is a challenge. “Digital pickup is so wide and phenomenal that it is a bright situation for us. We are looking at systems, processes, and products to bring in digital enablement,” he said. He mentioned that people covered by schemes like Garib Kalyan Yojna have started coming to the banks to withdraw money, to activate their cards, etc and they are reading SMS messages sent to them. “This is a very positive step even as people in cities explore all avenues to do things sitting at home,” he said.

“At the same time,” he maintained, “employees and employers matured. The humanitarian side of employers became evident. The first 7 days, I had more Zoom meetings than ever before. People have got used to operating digitally from anywhere,” he added,


Sunil Soni, General Manager – IT, Punjab National Bank, says what the bank did at the time of demonetization is what it has been doing during COVID. “Those customers who were reluctant and apprehensive are coming onboard digital platforms. “The question, however, is,” says he, “how safe it is for a bank to have its employees work from home.”

Rajesh Ram of Bank of India says attendance of bank employees was much better than those of vendor employees during WFH. “I found our employees to be very cooperative. Obviously, IT employees had fewer challenges than frontline staff.

Focus was more on safety than on productivity. Technology companies are better at work from anywhere as they have structured and matured it. As bankers, we can try to learn from them,” he adds.

Subramanian of IDBI Bank is of the view that WFH, which came in the wake of the lockdown, should examined thoroughly for its pros and cons. Wi-Fi networks at home may not be very secure, says he, adding there are RBI guidelines on VPN access for people working at home – including hardening of laptops. “There is the issue of someone other than the employee viewing customer data on the computer at home. These issues need to be examined when the pandemic ends. There is need to review security solutions from vendors whose employees are working from home. Also, SOC needs very good infrastructure and there could be slight reduction in the performance of SOC operators, as they don’t have access to 100-inch TV, etc. We have to pat ourselves on the back for seamless service to customers. Another positive thing is the welcome migration of customers to digital channels but there is need to spruce up security there,” he elaborates.

He revealed that the bank will soon host ifs near DR site.


Stating Dell is a pioneer in WFH, Prasanna Ranade, however, says there is a difference between WFH part time and WFH full time. “After 3 months of lockdown, we need a strategy for this to go on for a long time. We have digital workspace platform Workspace ONE in place for all our employees. Banks are looking at virtual desktops for creating a strong security. Security has to be data centric rather than device centric. Also, banks are looking to enhance their SOCs and creating data lakes and analytic engines to analyze how people are trying to enter into the environment,” he said. He reveals that most private sector banks have adopted VDI and planned for 30% or so staff to work from home. However, the perspectives of bankers from PSU banks are quite different from those at private sector banks.

Suryanarayanan of Central Bank of India says while WFH has afforded an opportunity for banks to enhance its digital capabilities, it is also an opportunity for hackers. “Less than 5% of staff can work from home, especially branch employees. IT employees can work from home but need better security set-up and practices. Even with VPN at home, members of the family have a chance to get the bank’s data. They must not share this data outside. At Central Bank of India, we have shared guidelines to employees in this regard,” says he.


Discussing the mergers and consolidation in the banking sector in India, Ratan Kumar of Central Bank of India., says consolidation is for creating new opportunities. “Size and capital base of Indian banks is so low that we can’t compete with international banks. The current mergers will help Indian banks in terms of increasing business, geographies, technologies, skills, and customers. It can help us scale up organically,” he explains.

Sunil Soni of Punjab National Bank points out that post-merger the income and profits will go to the government kitty as earlier all banks were competing for the same pie and undercutting each other. “Now,” says he, “there is greater opportunity for up-sell and cross-sell. We have to look at each product and process and rationalize them so that the fruits will be far bigger and better. The investment in technology will also be pruned. We will have to spend a little more now than otherwise, and after 2 years, we will see economies of scales as products, processes and infra will get synergized, says he. He underscores the need sanitization of information platforms with new infrastructure coming to the lead banks. In addition, there is an urgency to create a common culture and values.

Soni is emphatic that for successful mergers, there has to be democracy rather than arm twisting. “From an IT perspective, there has to be consensus on which internet banking system should prevail, which HR system should continue. Also there has to be an assessment on the available infra for shortlisted products and also the ones that are latest and have the longest residual life. This is simple to say, but difficult because all the entities have to run until amalgamated, so as to avoid customer difficulties. So this requires temporary investment to handle growing load. Economies of scale will come only over a period of time. The board has to be convinced for approvals, and they will ask for all kinds of alternatives. Hence the importance of micromanaging the merger process,” adds he.

Another aspect he stresses is creating verticalization and using people effectively and more responsibly. “We are automating processes so that people and teams and managers can automatically come to know their productivity levels,” says he. People, he says, at crucial at this phase and there is need to have them back on their feet from the twin events of mergers and the lockdown.

He also points out that HR amalgamation is the most critical.

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