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Impact of Banking Reforms On Organisational Structure of
Impact of Banking Reforms On Organisational Structure of
The Organizational structure of any bank depends upon its functions and objectives it desires to attain with the performance of such functions. The organizational structure of the bank was simple and centralized in the past. All the decisions and authority was in the hands of head office. The growing network of branches, change in technology, e-banking activities, issue of credit cards, debit cards, ATMs etc. led to many important organizational changes. The organizational setup of modern commercial banks is functional-cum-territorial.
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5. 6.
7.
8.
The main function of top executive must be relating to policy formulation. A zonal office should be there to control and guide the 200 to 300 branches. The zonal offices should engage in activities of economic analysis, data collection, branch expansion, overall policies related to deposit mobilization etc. The branch manager should be relieved from day-to-day activities to enable him to devote sufficient time to plan, coordination, control, training, public contacts and business development. There should be separate departments for deposits, collections, remittances, safe deposit vaults, cash, clearing, advances etc. Each department should be headed by office-in-charge with sufficient authority.
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6. To fully utilize manpower resources who are well-
trained, skilled and innovative, this strength cannot be matched by any of its competitors. 7. To fully use SBIs international network of branches which has created the base on which a sound strategy for international business could be developed.
Earlier Restructuring
The State Bank of India, which inherited a given organizational structure from Imperial Bank of India in 1955, did organizational restructuring in 1971 and then in 1979 on the recommendations of a consultancy team of Indian Institute of Management, Ahmedabad. The changes were made with a view to provide promotional opportunities to staff members. In the process of restructuring, compactness of the organization was lost.
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y Following are the reasons which force SBI to change its
structure : a) Customers would be looking for products and services available internationally. b) The competition will increase and c) Deposit taking will become expensive. d) Technology will be the greatest challenge before the Indian banking system as it enters the new millennium.
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3.
Senior Management Forums It was decided to form a senior management team. The team shall have common performance goals and aspirations. The team shall have a clear accountability system for staff and business units performance. The form shall be organized on the basis of a simple structure.
As a result of this principle, following picture has emerged upon adopting a new team at senior management level : i. The new structure provides at the apex level a set of staff functionaries in the charge of policy planning functions. ii. Set of group executives having operational responsibility for the SBUs attached to staff functionaries. iii. All these executive function under the leadership of the chairman and together constitute the senior management team.
CHIEF VIGILANCE OFFICER CHIEF CREDIT OFFICER CHIEF FINANCIAL OFFICER CORPORATE DEVELOPMENT OFFICER INSPECTION AUDIT DEPARTMENT CORPORATE BANKING GROUP NATIONAL BANKING GROUP ASSOCIATES & SUBSIDIARIES GROUP INTERNATIONAL BANKING GROUP
4. Streamlining of Key Processes It was decided to identify the key processes in the bank and streamline them. The following key processes were identified for streamlininga) Credit and risk management. b) Improved balance sheet and performance management. c) Human resources and technology management. d) Inspection and audit system.
Chairman - the Chief Executive Officer Four Staff functionaries under the Corporate Centre, i.e.
a) b) c) d)
Dy. Managing Director and Corporate Development Officer. Dy. Managing Director and Chief Financial Officer. Dy. Managing Director and Chief Credit Officer. Dy. Managing Director (Inspection and Audit).
3.
The four Business Group which will oversee the operations of the bank would be headed by
a) b) c) d)
Managing Director and Group Executive Corporate Banking Group. Managing Director and Group Executive National Banking Group. Dy. Managing Director Associates and Subsidiaries. Dy. Managing Director International Banking
4. 5.
All the above eight functionaries report directly to the chairman and are independently responsible for matters relating to their group/staff area. In addition to above, the Chief Vigilance Officer will also report directly to the Chairman.