Question

In the 1980s, the then RBI Governor decided to computerize banking operations in the public sector banks. Anticipating resistance from the staff and union, he communicated the need of computerization due to global growth and technological advancement. Initially, only a few computers were installed for data collection and analysis. Gradually it was extended to cheque clearing operations. As collection of cheques became faster, over the next few years, computerization of clearing operations was taken up in key metros and other cities.

Q1. Describe the process of change implemented by the banks, using Kotters' 8-Step Model. (30 lines)

Answer 1

Well obviously there is a lot of excitement these days around technology in the space of Indian banks. Have to notice how this process was started.

It is around 1982 contrary an most who would think it started post 1991 actually much of changes in Indian economy started around 1980 s and 1991is just the time when all these things came together and became more reinforced

A few months after Manmohan Singh took over as a governor In September 1982 in reshuffle of portfolios one of his deputy governor C rangarajan who had joined little earlier during the previous governor ig Patel tenure was assigned the responsibility of some of major operational departments with in the central bank including the monetary policy and exchange rate management rangarajan who had thought at IIM Ahmedabad for long had virtually little to do during the Patel days with no core functional responsibilities in the first half of 1982

But that changed when Singh took over one of the primary issues Singh took up was the computerization of banking operations. He knew that there would be resistance to the change from unions and staff and so told them that given the pace of global growth and technological advancement mechanization was inevitable.

Those were the days of enormous delays in cheque clearance, with money taking weeks to get credited to the accounts of the customers

defeating the object of moving away from currency to paper based transactions worryingly there were lots of issues relating to reconciliation or tallying of transactions at the end of the day there were instances of funds beibeing set a side in separate accounts to handle these discrepancies Singh told the bankers and unions process of computerization not only for increase of productivity in the industry as evident in many other parts of the world but also involved public interest in providing better services

THERE WAS A SEQUENCING HERE AS WELL

Prior to that a few computers installed in a bank with staff being told that it was for data collection and analysis not for transactions

By 1982 the decision had been taken to computerized cheque clearing operations slowly it was extended to the central bank clearing houses and for its own transactions Singh then appointed committee headed by rangarajan to consider mechanigation in banking industry trade unions especially those in westbengal was fiercely opposed to this change they feared mechanism lead to job loss Singh met with West Bengal chief minister jyothi based without much success

Rangarajan went to meet basu who told rangarajan to first convince his ministers rangarajan is known to have responded politely saying he thought that it is chief ministers job

at that time based bass had returned from Germany may have found merit in rangarajan arguments but pursuant workers is no an easy task

A