NABARD is India’s apex bank, which facilitates credit flow for promotion and development of agriculture, small-scale industries, and rural activities. The Finance and Accounts Department (FAD) went live with the implementation of the SAP CFM treasury module in November 2005.

Legacy System not good enough

The major functions of the FAD include management of funds, preparation and presentation of quarterly and annual financial results of the bank, and submission and filing of statistical returns to RBI and Government of India. The department also handles matters relating to the financial budget of the bank, corporate income tax, loaning operations, asset liability management and monitoring the functioning of subsidiaries like NABARD Consultancy Services and State Level Agriculture Finance Development Companies in 3 States. To support this, they needed speedy processing of information and a robust, reliable system that could be upgraded, irrespective of the amount of data put in it.

Their in house IT department had created a system using a combination of Cobol, Foxpro and Excel spreadsheets. A Lahiri, DGM and head of Treasury, NABARD explains, “Any software becomes dated the moment you buy it. Our previous system was good, however, it couldn’t capture the complexity of the market.”

Easy Adaptability of SAP CFM

This legacy system was completely replaced with SAP CFM over a period of 10 months. The data was migrated, without interrupting the functioning of the treasury. Essar IT, who implemented it, won the tender against players like TCB, LTIL and others.

Sumant Kelkar, CIO-OBG, Essar IT, believes that the implementation period could have been shorter. He mentions, “We were ready with the deployment in 5-6 months, but there was a delay because IBM, the hardware supplier faced some issues getting development servers from Singapore. There was a communication gap between IT and FAD, as the driver of the project was the latter, not the former.”

The system has seven users in all, including 3 dealers, 1 from the money market who handles CBLOs and deposits, 1 from the mid office and 2 from back office. According to Lahiri, “Overall, not much customisation of the software was needed, however we did have to train the people. The security and the MIS was of course customised, but the actual investment yields, reviews, and the series of data generated didn’t need any.”

Automatic data upgradation

Mutual fund reports, brokerage reporting, goal limit management, and ALCO reports are all taken care of by the system. Profit on sale is now easily calculated as well. One of the significant benefits has been in the area of investing funds. Earlier, they had to wait till about 2.30-3.00 p.m. before investing. Now, with the immediacy of data, they can invest it in the morning and capitalise on the time saved to get the best returns.

As Lahiri informs, “Now, we are assured of smooth and automatic up-gradation of data. Even if a concerned person moves out, we can be assured of not missing out on much.”

Having experienced first hand financial benefits through the use of IT, NABARD is now looking at implementing ECC 6.0 and other CFM modules like Finance, HR and integrating CFM with the treasury.