In a major initiative, Vysya Bank has announced that it is earmarking Rs 600 m for setting up a centralised online banking project which will be in place by the end of the next year.
Vysya Bank is India’s largest private sector bank and has approximately 400 branches.
Brussels Lambert, a Belgian bank, has a 20% stake in the bank.
The bank posted net losses of Rs 444 m for the year ended 31st March 1999 and has staged a modest recovery by returning profits of Rs 27 m for the nine months ended 31st December 1999.
The proposed investment is for networking of branches and computerisation of operations. This will enable the bank to reduce manpower costs and improve the efficiency of its day to day operations. Integration of all its branches shall facilitate swifter transfer of inter branch funds and also enable internet banking for its customers.
This will also bring about a better monitoring of advances and loans made, due to swifter exchange of information. Faced with increasing competition from technology savvy banks such as ICICI and HDFC, the bank is left with no choice but to upgrade itself technologically.
Having incurred losses in lending due to imprudent policies, the bank is now looking to diversifying into the insurance sector by acquiring a 26% stake in ING India.
It remains to be seen whether these measures would boost the sagging bottom line of this bank, that has been upstaged by newer entrants, that have adopted aggressive marketing strategies with excellent risk management techniques and efficient customer service.
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