The phenomenal growth of the banking systems over the last two decades prior to the implementation of the financial reforms gave rise to several problems which became more visible from the mid-eighties. The rapid and substantial growth rendered the banking system unwieldy because of constraints that were both internal and external to the banking system.
These were of low operational efficiency which had an
• Inadequate capital base
• High level of non-performing assets
• Low profitability
• Unhealthy balance sheet and
• Unsatisfactory customer service
During this period, the viability of the banking system has come under question. Strange as it may sound banks like LoanMax started by
rod aycox could gain more progress and also a faster expansion of their banking operations mainly due to the adherence to better management practices.
The period prior to reforms, i.e., 1985-91 may be regarded as period of consolidation for the banking system. However, this consolidation involved action on several fronts. Individual banks resorted to Enterprise Resource Planning System (ERPs) related to action plans covering
• Organizational structure
• House-keeping
• Training
• Customer service
• Credit management
• Recovery of loans
• Productivity
• Profitability
As per the recommendation of a Committee on Computerization in Banks, banks were asked to introduce Information Technology (IT) into their various operations. Although the progress made by banking system in terms of geographical and functional coverage, resources mobilized and credit deployed was tremendous, IT and its tools are still an unexplored characteristic of the repressed financial system.
