“I serve a client-base larger than the population of Australia”

Stepping out of an SBI ATM in a remote part of Vellore district in Tamil Nadu, SK Sehgal was stunned at seeing over a dozen villagers anxiously waiting for him. His amazement stemmed from the fact that the people were waiting with garlands in their hands!

They surrounded Sehgal, expressed their gratitude and heaped him with garlands. He was also presented with a basket full of coconuts, of which he accepted one. The people were ecstatic to know that he was the man responsible for setting up this computerized wonder (ATM), which gives out money simply by putting in a card.

For many, it was the first interaction with a computer, or rather a computerized machine. As a general manager (IT) at State Bank of India, Sehgal was accustomed to everything but being treated like a celebrity.

Yet, in many ways, Sehgal deserves the credit and more so, the State Bank of India. The largest PSU bank in the country, SBI has taken the onus on itself to take banking to the remotest corner of the country. Thus, while the big corporates bank slug it out in the cities and towns of India, SBI has been silently and steadily networking all the different parts of the country from Kargil to Kanyakumari on a single banking platform.

Sitting at his modest office in Belapur, Navi Mumbai, Sehgal is bringing about this change. He has been with SBI for over 34 years now and seems to be as tech savvy as a 34-year-old.

In an exclusive interaction with Shashwat Chaturvedi from CyberMedia News, Sehgal talks about the transformation that is taking shape at SBI. Excerpts:

How has the IT infrastructure changed over the years at SBI?

In many ways SBI has been a pioneer when it comes to technology. We started tinkering with technology sometime in mid `60s, using punch cards for reconciliation process. Then in the `80s, we selected about five solutions to be deployed in around ten or so branches. We termed it as full branch computerization. But, in was in 1991 that we got into IT with all earnestness. After a global tendering process, we entered into contract with Kindle, an Irish company. 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.

By 2003, all branches had been computerized using the Bankmaster application. Our IT infrastructure is spread over the country. We have our main servers here in Belapur, and an equivalent set up in our DR site in Chennai. For connectivity, routers are placed at various places in the country. Today, we are running a network that is probably bigger than some network service providers. We already have nearly 11,000 offices connected. We also have IP telephony that operates on my internal network and not any telecom service providers’ network.

What is the current status of network at SBI?

Presently, there are 4750 branches that have migrated from Bankmaster to core banking solution. Next year we hope to complete core banking in all our branches and banks. At SBI, we have around 9500 branches, but we also have seven subsidiary banks. All those banks, around 4700 branches, have been put on core banking. We don’t open any branches now without core banking system. Now we are in the process of converting all those branches from Bankmaster system to core banking one.

How many ATMs do you have?

We have 6000 ATMs spread across more than 1600 centers across the country. Some areas have high concentration of ATMs because of high customer base. There is not a district in India, which does not have an SBI ATM. As of now, we have the largest ATM network in the country and we are in the process of installing 2000 more ATMs by the end of this year.

What is the number of customers that SBI and its subsidiary branches have?

To be honest, it is my business secret. I can tell you one thing though, that it is more than the population of Australia. In due course of time, we expect to have a customer base of 150 million and more.

How do you connect all these branches an ATMS?

Sadly, the kind of infrastructure for connectivity is not uniform throughout the country. I still have branches in remote locations of this country where connectivity is a big issue. I am forced to adopt the wireless route, as no other connectivity is available. Presently if I look at my connectivity we are using landlines, leased lines, VSATs; we probably have one of the largest deployments of VSAT in the country

What are the kinds of transactions that are carried over SBI systems?

It is huge. We have a large number of branches spread all over the country. In terms of business transactions, we handle the largest chunk of banking business. We have around 2,00,000 staff who login to the system everyday. In addition to my branches I also have 6000 ATMs from which transactions are coming 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 are happening in the centralized system here, the branch only has a link. There is no transaction in the branch per se. Beyond that everything is taken care centrally, including generation and distribution of reports.

How rugged is your switch infrastructure and what about your data backup and DR plans?

Quite rugged. Take the instance of the Mumbai deluge on 26th of July 2005. Every SBI branch abroad functioned without any hitch. All ATMs, barring those that were flooded, were working smoothly. On that day around 600-700 ATMs countrywide 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 on providing the basic services from our DR site in Chennai.

Your views on outsourcing?

I am a votary of outsourcing. Technology is changing ever so speedily. It can become hard to keep pace with that change. In any business, there are core activities that need to be retained and non-core that should be outsourced. What I emphasize is that a company should have total control over the outsourced functions and should have a system to monitor the progress. Thus, whenever we outsource, we have to ensure that proper rules and safety mechanisms are there in place. As of now, TCS is helping us out in customizing our applications. Datacraft is my management consultant for networking. There are few tasks that are done exclusively in-house such as all implementations. Our in-house team is also spread over several places. We have nearly 300 systems people working in Belapur alone, but we also have 14 local head offices (LHOs) who have their own IT teams.

Is outsourcing easy or difficult?

That is a very tricky question. It all depends on how well you have built in the processes. While there is nothing perfect in this globe, the day software starts working perfectly without a hitch people would stop believing in God. Yet, one should work at putting well-documented and sturdy processes in place.

What is kind of investment made on IT at SBI?

It is not possible to arrive at a figure, as IT is an ambiguous term now. For instance, buying a desktop can be termed as an IT investment. Broadly, the expenses on core banking over a period of 4-5 years have been around Rs. 500 crores. But this doesn’t include the cost of ATM machines, infrastructure required to house those machines, cost incurred on network, etc.

Are you looking at new technologies like voice and video?

Not only are we looking at them, we are using them extensively. As I said earlier, we have our own internal VoIP network that links all our branches. We also use video-conferencing extensively. I am also looking at a host of options that would help our customers in the coming days.

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