Can you briefly talk about the evolution of the IT infrastructure at SBI?
We are pioneers in IT. We started deploying technology sometime in the mid 60s. That was the time when we first had the punch card system of computers. In the mid 80s, we started an experimentation of sorts where we selected about five solutions to be deployed in branches as a full branch computerization. That is what it used to be called in those days. There was nothing known as core banking at that point of time. These solutions we implemented in some 8-10 branches as a back office system, where my branch was functioning as a regular branch, but day-end vouchers used to be posted in that system. In 1991 we entered into a contract with Kindle, an Irish company. There was a global tendering process before the Bankmaster application was selected. We went for an application that could be deployed not only in SBI and all its group branches across the country, but also in our offices abroad. We gradually started implementing Bankmaster in a few selected branches during the initial years. During the mid-90s we started deploying this application in around 600 branches in India. By 2003, all branches had been computerized using Bankmaster application.

Our IT infrastructure is spread over the country. We have our main servers here in Belapur, and an equivalent set up at our DR site in Chennai. For connectivity, routers are placed at various places in the country. My assets are spread over the country, but my major assets are in this office because the main servers are here. Today we are running a network which is probably bigger than some network service providers. I already have nearly 11,000 offices which are connected here. We also have IP telephony which operates on my internal network and not any telecom service provider's network. Every branch which is on core banking necessarily has this too.

What were the challenges you faced during the transition from the manual system to the computerized one and now to core banking?
In 1991, when we started deploying distributed systems across the country, one of the first challenges that we faced was that people were not comfortable with the keyboards. Secondly, computerization also resulted in some process changes, and what I would call change management. This was the biggest challenge. The work flow changes-the voucher movement in a manual system was also different from that of a computerized system. Application stabilization also has a time frame. It takes some time before any new application is stabilized in an institution. Because internal functions were a bit different across branches, some processes of customization had to be carried out in those applications. I would say it was a cultural change for the employees. Towards the end of 1999, people had started accepting computerization so much, that during the seven-month period in 2003, when we computerized 9,000 branches, the biggest facilitating factor was the very high degree of acceptance of the Bankmaster application by our staff.

What is the current status of core banking?
Presently, there are 4,750 branches which have migrated from Bankmaster to the core banking solution. In February and March, when our annual closing exercise begins, we generally stop migration and recommence it from April 15 onwards. Next year we hope that we will complete core banking in all our banks. We have around 9,500 branches in SBI. We also have seven subsidiary banks. All those banks, around 4,700 branches, have been put on core banking. We don't open any branches now without the core banking facility. Now we are in the process of converting all those branches computerized on the Bankmaster system to core banking.

Can you tell us the number of customers that SBI and its subsidiary branches have?
Although it is my business secret, I can cite one comparison-that it is more than the population of Australia. We expect that in due course of time we will have a customer base of 150 million.

How many ATMs do you have and what is their spread across the country?
We have 6,000 ATMs spread across more than 1,600 centers across the country. I can broadly say that we don't have a district which is not covered by my ATMs. Today we have the largest ATM network in the country, and we are in the process of installing 2,000 more ATMs by the end of this year.

How do you manage to overcome connectivity problems to roll out core banking?
The kind of infrastructure that is required for connectivity is not uniform throughout the country. I still have branches in remote locations of this country where infrastructure is very poor. I am forced to adopt the wireless route as no other mode of connectivity is available. Presently if I look at my connectivity, we are using landlines, leased lines and VSAT. Probably one of the largest deployments of VSAT in the country would be in SBI. A large number of my ATMs and my branches are working on VSAT as a standby arrangement. There are also the difficulties associated with badly regulated power supply.

Who is your preferred telecom service provider?
Our primary service provider is BSNL. No other service provider has the kind of reach that BSNL has. Even now when I go to deep rural areas, I don't know how many places I will have connectivity available from anybody else. Wherever possible we have taken the primary connection from BSNL and the secondary connection, as a standby arrangement, from some other service provider.

How efficiently do you handle the core banking system from your data center in Belapur?
We have a large number of branches spread all over the country. In terms of business transactions, the largest chunk of banking business is handled by us; so obviously my customer base is also very large. We have around 200,000 staff who log in to the system everyday. In addition to my branches I also have 6,000 ATMs from which transactions come into my system. We are constantly upgrading our centralized system in Belapur so that we are equipped to handle more transactions. Whatever transactions are carried out in my core banking branches, the actual transactions happen in the centralized system here-the branch only has a link.

How prepared is your ATM switch infrastructure to handle natural or man-made disasters, and what about your data backup and DR plans?
A lot of my overseas branches are controlled from this data center. We put the sensitivity of the transactions in my foreign offices at a slightly higher level, because there it is also a question of my country's prestige. During the Mumbai deluge on 26th July, 2005, every SBI branch abroad functioned without any hitch. All ATMs, barring those which were flooded, were working smoothly. In some cases water had entered some ATM machines rendering them non-functional. On that day around 600-700 ATMs country-wide were down, the rest were fully functional. Contrary to perception, there was no large-scale breakdown of our ATM network; only in some pockets ATMs were affected. But we kept providing the basic services from our DR site in Chennai. We have now got ISO certification-which is considered the highest certification for data center activities-for both our data center and our DR center. This proves that our system is robust enough to handle any exigencies.

What are the security measures that you have taken and how secure is your SBI network?
SBI was the first bank in this country to come out with a documented information security policy. We have a full-fledged department with a chief information security officer (CISO) designated to look at all security matters. Not only networking, all aspects of security in information technology-even outsourcing-are covered in this security policy. We ensure that we don't deviate from it. As far as networking is concerned, we have gone to the extent of even defining what kind of compression/encryption should be done. We have got an antivirus, firewall and IDS in place. I can say that my network is impregnable. However, we are still looking at various solutions to further improve our security.

What is the total IT investment of SBI in monetary terms?
Broadly, I can tell you that the expenses on core banking over a period of 4-5 years will be around Rs 500 crores. But this doesn't include the cost of my ATM machines, infrastructure required to house them, cost incurred on the network, etc.

Early this year SBI announced its plans to set up 6,000 rural kiosks all over the country. How big a technological and logistical challenge will it be to install and manage these kiosks?
Our main challenge, whether in rural or urban areas, is basically infrastructure. But we are exploring every possible avenue available, including wireless technology. I am a very strong votary of wireless technology because we cannot afford to have an exchange going down. In a lot of rural areas the exchanges don't have the required level of automation. I cannot get a dedicated line; ISDN facilities are also not available. With wireless I am in a position to overcome a lot of limitations. Moreover, it is much cheaper than VSAT. The only apprehension that I have is the level of infrastructure available. Some areas may have very bad infrastructure with no service providers available. In such areas we will have a serious problem. The second challenge will be finding people for its maintenance. We have a separate banking unit (SBU) which is being set up for this purpose.

Ratnadeep Gupta
ratnadeepg@cybermedia.co.in