ORGANIZATION PROFILE

CORPORATION BANK

Type

Public (BSE, NSE:CORPBANK)

Founded

Udipi, 1906

Headquarters

Corporation Bank,
CORPORATE OFFICE ,
Mangaladevi Temple Road
Pandeshwar
Mangalore 575 001 India

Key people

Chairman B. Sambamurthy

Industry

Banking

Products

Loans, Credit Cards, Savings, Investment vehicles, etc.

No. of Employees

14000

Net income

Rs 3171 Million(2013-14)

Website

http://www.corpbank.com/

BRIEF HISTORY
Established in the year 1906, Corporation Bank is an organization based on the traditional
Indian values of service to the community. Corporation Bank is regarded as one of the well-

run banks in the comity of Public Sector Banks in the country. The Bank has a unique history
of 100 years of successful Banking and has stood the test of time by growing steadily,
offering vast, varied and versatile services with a personal touch. Today, its good customer
service, pre-eminent track record in House Keeping, adherence to Prudential Accounting
norms, consistent profitability and adoption of modern technology for betterment of customer
service have earned the Bank a place of pride in the Banking Community. The Bank has been
richly endowed with a relatively young, dynamic and efficient manpower, which is the key
factor of the Banks success. Excellence in performance and uniqueness in customer service
form the central core of the Banks organizational culture. The growing confidence of its
clientele is well reflected in the Banks performance in all critical areas of its Operations all
through the year.
The Bank is a Public Sector Unit with 57.17% of Share Capital held by the Government of
India. The Bank came out with its Initial Public Offer (IPO) in October 1997. The Banks Net
Worth stood at Rs. 4,980.18 Crores as on 31.03.2014.
Branch Network
Banks total service outlets crossed 8,600 mark to reach 8,617 units, comprising of 2,021
branches, 2,264 ATMs and 4,332 Branchless Banking units. Of these, 314 branches, 839
ATMs and 787 Branchless banking units were operationalized during the year. Business
growth and branch network expansion Necessitated fresh recruitment to the extent of 966
employees during the year. The total staff strength stood at 12465 on 31 st March, 2009
compared to 12011 in the previous year. 21.2 The staff productivity in the Bank increased
from Rs.839.19 lakhs as on 31.03.2008 to Rs.1048.86 lakhs as on 31.03.2009, recording a
growth of 24.98%. Net Port per employee increased from Rs.4.79 lakhs to Rs.7.64 lakhs
during the year.
Operating Performance
In spite of the challenging environment, the Bank continued to show a better performance
under business parameters. The Bank has reached a business level of over 3.30 lakh Crores,
by registering a growth of 16%. Deposits of the Bank crossed a level of 1.93 lakh Crores,
while overall credit scaled up to 1.37 lakh Crores. The Bank has registered a healthy growth
in agriculture, MSME & retail lending. The Bank could also achieve the regulatory target of
40% of ANBC in Priority sector lending. Besides, the Bank has also come out with various
innovative products services to give a better customer experience and accelerate our pace of

growth. The Bank has crossed a landmark Branch Network of 2000 and ATM Network of
2000.
The company reported revenue of Rs. 3.30 lakh Crores during the fiscal year 2013 (2013).
The company's revenue grew at a CAGR of 21.20% during 2009 - 2013, with an annual
growth of 16.73% over 2012. In 2013, the company recorded a net profit margin of 8.51%
compared to a net profit margin of 10.45% in 2012.
The Gross NPA stood at 3.42% and the Net NPA stood at 2.32%. The Bank has effected Cash
recovery and upgradation of NPAs to the extent of 1,355.53 Crores as compared to 1,509.30
Crores last year.
SWOT Analysis
Strengths

Broad portfolio of products and services

The bank offers variety of products and services catering to variety of customers ranging
from premium customers to common people. It offers products such as Mobile Banking App
and e passbook for customer convenience and as part of green initiative.

Capital adequacy
The bank has maintained a high capital adequacy ratio of around 12% over last 10 years
against the requirement prescribed by RBI of 4%.

Increase in total deposits

There has been steady increase in deposits to Rs. 193393.01 Cr in 2013-14

Strong distribution network

Banks total service outlets crossed 8,600 mark to reach 8,617 units, comprising of 2,021
branches, 2,264 ATMs and 4,332 Branchless Banking units

Weakness

Declining financial performance

The Banks financial performance has not witnessed the growth as compared to other
banks of equal size.

Opportunities

Growing Indias annual disposable income

The average annual disposable income in India increased by more than 29 percent in real
terms between 2007 and 2012 and reached to to 80663730 INR Million in 2012.

Growing Indian Consumer finance market

The demand for residential and commercial property supported the growth of real estate
and in turn increased the demand for mortgages/housing loans in India. As per RBI, the
gross non-performing assets (NPA) or the bad loans of the domestic banking system stood
at 4% of gross loans at the end of December 2013. The ratio of bad loans to total loans
saw marginal decline in 2014 due to combined security measures from RBI and the
banks. Both RBI and the banks continued their focus on strengthening loan disbursement
process starting from verification and screening of application to recovery mechanisms.

Strategic initiatives
A large no. of new initiatives are being taken through both fiscal and monetary policies
related to banking sector.
Threats

Changing regulations
There have been constant changes in regulation related to banking sector. Regulatory
policies like Basel Norms put constant pressure on banking sector operations.

Fluctuations in Interest rates

RBI has to change interest rates constantly due to high inflation and low IIP.

Major Operating problems faced in Corporation Bank

Time to clear cheque

Time to create drafts
Time to update Passbook
Loan Processing / Savings Account opening time
Time to deposit cash

BUSINESS PROCESS REDESIGN BPR

The complete overhaul of a key business process with the objective of achieving a quantum
jump in performance measures such as return on investment, cost reduction and quality of
service. Business processes that can be redesigned encompass the complete range of critical
processes, from manufacturing and production, to sales and customer service.

Need of BPR in Bank

BPR lowers the cost significantly as compared to a new system development.
BPR improves the overall quality of services of the particular organization.

BPR is useful in beating the market competition and in attaining the maximum
market share.

BPR is useful in obtaining dramatic industry growth rate

In the banking industry, the Business Process Re-engineering (BPR) means transforming
the select processes and procedures with a view to empower the bank with contemporary
technologies, business solutions and innovations that enhances the competitive advantage.
BPR can be defined as the fundamental reconsideration and radical redesign of
organizational processes, in order to achieve drastic improvement of current performance
in cost, service and speed. To ensure survival in the changing global environment it is
essential that banks respond to major trends reshaping the markets.
Objective: The objective of a BPR initiate is to create and enhance the value of the bank
for the customers. It takes into account 4 important aspects customer (to given him
enhanced value), competition (to meet it successfully), change (to manage it) and cost (to

reduce). The basic objectives of BPR are to reduce the transaction process time without
sacrificing security aspects, quality and real time service to clients and extensive
propagation of single window concept. BPR basically aimed at maintaining long term
profitability and strengthening the competitive edge of banks in conforming to
transforming market realities.
Process: There are three key parameters for BPR i.e. customer service, product innovation
and operational excellence. BPR envisages a number of activities such as procurement,
order fulfilment, product development, customer service and sales. The process involves
identification of the business processes to be redesigned, understanding and measuring
the existing processes, identifying the information technology levers and designing and
building a prototype of new process.
Benefits: There is growing need for use of BPR to further the strategic goals of banks.
BPR can benefit the customers through significantly reduced transaction time, flexibility
in servicing and improved value. The banks can be benefited by increased volume of
business and higher productivity, reduced operational cost leading to higher profits,
improved employee loyalty and sense of belongingness and establishment of bank within
a branch concept. Employees benefit through empowerment leading to higher job
satisfaction, effective job rotation as an additional incentive and effective interface with
customers as work load is evenly distributed.
Corporation Bank of India completed a Six Sigma project to make its business processes
and operations more efficient. Wipro Infotech facilitated the project, which started in June
2004. Along with improving its internal processes, the project installed a culture of
continual improvement at the bank. Wipro Infotech helped to garner the requisite Six
Sigma skills to make Banks systems and processes much more efficient in identified
areas. They are taking a data-oriented, analytical approach to facilitate the application of
six sigma within the bank.
Implementation of Core Banking
Core Banking is normally defined as the business conducted by a banking institution with
its retail and small business customers. Many banks treat the retail customers as their core
banking customers, and have a separate line of business to manage small businesses.
Larger businesses are managed via the Corporate Banking division of the institution. Core
banking basically is depositing and lending of money.

Compared to a decentralized setup, the Core Banking Solution has the following
advantages:

Centralized database for performing various online banking utilities

Facilitates Any Branch Banking

Shifting of time consuming activities like End of Day (EOD) processing,

Interest calculation, interest posting, debiting inward clearing cheques etc., to centralized
location to enable the field level functionaries to concentrate on customer service and
marketing activities

Facilitates centralized auditing of branches

Provides for effective monitoring by the controlling offices
Facilitates ease of maintenance of the package
Enables simultaneous launching of new products across all branches connected to the

CBS
Paves the way for setting up a Data Warehouse
Facilitates better MIS as a decision support tool.
The Core Banking environment offers a totally different perspective from the business

angle when compared to a decentralized environment. With the Core Banking in place,
the focus of erstwhile "Branch Banking" will shift to "Bank Banking". Further, the
banking operations assume "Round the clock" capability which is not limited by closure
of the branches, holidays etc.

Cheque Clearance Existing Process (Existing Process)

Clearing Process: The clearing process begins with the deposit of a cheque/other clearing
instruments referred above in a bank. The bank arranges the cheques submitted to it for
clearing bank wise and presents it in the clearing house to other banks. When there are more
than one bank branch for a bank in the clearing area, they would have a coordinating branch/
service branch to take care of presenting the cheques to the clearing house. Upon receipt of
the cheques/other instruments, they are passed for payment if the funds are available and the
banker is satisfied about the genuineness of the instrument. The cheques that are unpaid are
returned to the presenting bank through another clearing called the Return Clearing. The
realization of the funds occurs after the completion of return clearing and by the absence of
an unpaid cheque.

Cheque Clearance - Speed Clearing

Banks have networked their branches by implementing Core Banking Solutions (CBS). In
CBS environment, cheques can be paid at any location obviating the need for their
physical movement to the Drawee branch. The concept of Speed Clearing combines the
advantages of MICR clearing with that of CBS. Cheques drawn on outstation CBS
branches of a Drawee bank can be processed in the Local Clearing under the Speed
Clearing arrangement if the Drawee bank has a branch presence at the local center.
How is Speed Clearing an improvement over collection basis?
Outstation cheque collection through collection basis takes around one to three week time
depending on the drawee center. Under Speed Clearing, it would be realized within 48
hours. Further customers need not incur any service charge for collection of outstation
cheques (value up to Rs. 1 lakh) in Speed Clearing which they may have to incur if such
cheque is collected under collection basis.
Even local cheques will be cleared in 1 2 days
Outward Clearing:
1. Ease in Implementation
2. Reduction in processing costs and Operational Overheads

3. Elimination of logistics attached with handling outstation instruments

4. Improved Fund Management
Cheque Truncation System
CTS 2010 is the standard prescribed by the RBI recently for cheques issued by all banks
in the country. CTS stands for Cheque Truncation System and essentially means that
instead of sending the cheque in physical form by the collecting bank to the paying bank,
an electronic image of the cheque is transmitted to the drawee branch for payment
through the clearing house, thereby eliminating the cumbersome physical presentation of
the cheque to the paying bank, thus saving in time and costs involved in traditional
clearing system.
Benefits of CTS to Bank Customers
1. The main feature of the CTS 2010 cheque is that the physical movement of the
cheque is stopped and the images of cheques are transmitted electronically thereby
speeding up the process of cheque clearance and settlement between banks. This
obviously means quicker clearance, shorter clearing cycle and speedier credit of the
amount to account.
2. With the movement of cheques from one bank to another having been stopped, there
is no fear of loss of cheques in transit and chances of cheques being lost due to
mishandling, etc are totally avoided.
3. At present clearing is restricted to banks operating within a city or within a restricted
geographical area. Under the CTS, it is proposed to integrate multiple clearing
locations managed by different banks in different centres so that cheques drawn on
upcountry banks too can be cleared electronically without any geographical
restrictions.
4. The cheques in transit are most susceptible to frauds and customers of banks are the
worst sufferers in the present system of physical movement of cheques from one place
to another. Under the CTS system moving of physical cheques at different points is
obviated as only electronic images are transmitted between banks, and this will

considerably reduce the scope for perpetuation of frauds inherent in paper

instruments.
5. With the introduction of homogeneity in security features under CTS standards 2010
such as embedded verifiable features like bar codes, encrypted codes, logos,
watermarks, holograms, etc in every cheque leaf, it is now possible to detect frauds
easily through interception of altered and forged instruments while passing through
the electronic imaging system. This is expected to considerably reduce operational
risks and risks associated with paper clearing for the benefit of all bank customers.
6. The CTS is expected to improve operational efficiency of the entire banking system,
resulting in better customer service, improved liquidity position for banks customers
and safe and secure banking for the entire banking public.
Process of making demand drafts (Existing Process)
Customer
form
Checking

of

fills

form

Demand Draft
printed
Authorized
signatory
All

details of
noted

DD

Demand Draft
received

It can be noted from the above process that the above process involves many redundant
components and also suffers from bottlenecks. The above process implementation results
in more time and resources in making demand drafts.

Speeding demand draft process (To-Be)

Customer fills form

Checking of form

Demand Draft printed and Signatory signing done at

same place
Demand Draft
received

Speed demand draft process has advantages over traditional process it removes some of
the redundant process and bottlenecks as after checking the form the demand draft is
printed and signatory is done at same place and thus total time taken in the entire process
reduces significantly.
E Demand Draft
E-demand draft is an online Demand Draft generating application. E-demand draft is an
application which will help us to generate a demand draft online by the user itself. Thus
this application will reduce the work of the banks and will help the customer to get a new
facility at their place as result both can reduce their time of work. This approach will
reduce the overall time of both banks and customers, this also reduces the manual work
and banks will generate more revenue and will help the customer to get a new facility at
their place as result both can reduce their time of work. Conventionally, the people have
to go to the bank for collecting demand draft or the bank has to send it through post at the
mentioned address. This technology provides a facility where people can generate
demand draft sitting at home and they can take out the print out of the demand draft in the
same manner as we take the print out of the online generated ticket.

Pass Book Updating (Existing Process)

Customer fills form

Lines up in the
queue
Application
submitted

Employee checks all the transactions

Printed through manual intervention via Printer

Pass Book Updating (To-Be)

Kiosk and QR code implementation

Traditionally one had to wait to get your passbook updated. Now one can withdraw
money and simultaneously get your passbook updated at the automated teller machine
(ATM) instantly. Traditional method of updating passbook involves high cost as well as
inconvenience to customers. Every passbook update costs the bank Rs 70 to Rs 80. Banks
in association with NCR, a technology company, have planned to get the self-service
technology in India. NCR bagged a contract to install 3,000 ATMs for SBI. Canara Bank
has also signed up with NCR for installation of about 2000 ATMs. This deal includes
installation of biometric ATMs as well.
New Loan account / Savings Account / ATM card application processing (As-Is)

The above process involves different counters and different queues for different processes
resulting in wastage of time and resources of both banks and as well as that of customers.
New Loan account / Savings Account / ATM card application processing (To-Be)

One Case Manager

For all process

Case Manager routes

customer application
to appropriate
channel
Backend team checks
all the necessary
status (e.g. Credit
control officer checks
credit status of
customer for loan)
After processing,
backend team sends
the resulting status
to Case manager.
Case manager closes
the case.

The new process has a case manager alloted for all process. Customers approach to case
manager who routes customer application to appropriate channel. The Backend team
checks all the necessary status (e.g. Credit control officer checks credit status of customer
for loan) and after necessary due diligence, processing, backend team sends the resulting
status to Case manager. Then the Case manager closes the case. It can be inferred that the
above process is centralised as compared to previous process and this results in faster
execution and more utilization of resources.

Cash Deposit process transition through BPR

Existing
Process

New Process

Customer fills in a
application form

Depositing money
via Self-service kiosk

Customer waits in a
queue
Customer gets a
coupon
Customer again
waits for his/her
number
Again a new queue
Customer deposits
his/her money

In the new process a self-service kiosk is set up in the branch in which customer enters
his account no. manually or swaps his debit card and then deposits money in the account.
The kiosk has both currency note counting as well as detecting mechanism and after
placing cash in the designated slot it automatically calculates the amount to be deposited.
The kiosk also serves as a single point of contact where one can deposit cash and update
his passbook simultaneously.
The new process of cash deposit has following advantages
No need to line up twice
No need for unnecessary waiting
Passbook update at the same time

Results
Following results were observed after implementing Business process reengineering

The study was conducted to understand the effectiveness of Business process reengineering
in Corporation Bank. To serve the state objective of the study, the transaction time for each of
the stated processes was recorded for both before as well as after the implementation of BPR.
This shows that the introduction of Business process reengineering has made a significant
impact on cash flow of Corporation Bank. The growth percentage would further be increased
if the employees of the bank are given effective and complete training on core banking and
also by educating & increasing the awareness level of core banking to the customers of the
bank. Everything has been taken into account to judge the effectiveness. To conclude with the
concept of Business process reengineering has made a significant effect on operational
efficiency of Corporation Bank.
The Indian banking system though lauded by the global experts, especially in the time of the
recession has got a long way to develop, especially in the matter of customer relation. Total
Quality Management (TQM) in the Indian banking scenario can do a lot in improving the

present conditions, in rendering it more useful to the people and in improving the
profitability. Training the employees, fine-tuning the product mix, improving the top
management commitment to quality, fine-tuning of the processes of ensuring quality topbottom and bottom-top, reduction of retirement age, introducing employee development
programmes with the nature of an academic course, monitoring of the performances and
proper rewarding based on achievements, empowering the employees professionally and
personally, ensuring the customer satisfaction in everything etc are the ways suggested as a
aspects of Total Quality Management in Banking.