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Major Recommendations ofthe Rangarajan Committee

The Committee recommends that the process ofmechanization should encompass activities at the

branch, regional, and head office levels, with emphasis varying from one level to another.

At the branch level, a system will have to be so designed to ensure generation of data as a by-product ofthe operations at the branch level.

Branch level mechanization should be implementedunder either Model I or Model [I of mechanization.

Mechanization: Model I

Under Model I, stand-alone electronic ledger postingmachines with attached memory modules will be instal-led. The machine will have a typewriter keyboard, avideo screen, two floppy disc drives, and a printer. Themachine:

maintains primary ledgers and posts transactionentries in them.

works out products and interests at periodicalintervals.

prepares statement of accounts for customers, and

li s ts standing instructions to be executed in theaccounts.

For different counters, dedicated functionalmachines should be developed. For example, one of themachines will be designed to generate day book andgeneral ledger. On an average, each branch may needthree or four such machines.

Mechanization: Model II

In the alternate model of mechanization, Model II,- asingle microprocessor-based system of large capacitywill be installed. This machine will store all primaryledger and general ledger accounts, and besides

performing all the functions of the electronic ledgerposting machine described above, it will print out vari-ous statistical returns and statements for branch levelinformation system.

Service Branches

To facilitate speedy clearance of cheques, servicebranches should be established by banks in centreswhere they have more than ten branches.

Foreign Exchange Transactions

Information system on foreign exchange transactions inlarge branches should be supported under Model II ofmechanization. In such large branches, the micro-

processor-based system which will be installed to sup-port domestic business should also be used to processforeign exchange transactions.

(Continued overleaf)

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The Committee envisaged the various benefitsof mechanization in the areas of customer serviceand housekeeping.

Customers will get neat and accurate print outs of transac-tions on their account; all the standing and ad hoc instruc-tions will faithfully be executed and the periodical interestcalculations will be accurate. As regards house keeping op-erations, once the vouchers are tallied with the machine list-

ing of transactions in the form of supplementaries, the daybook and general ledger will be posted and balancing ofbooks will not pose any problem. The safety proceduralchecks to protect the customer and the bank will automati-cally be carried out by the machine once it is designed forthe purpose. (RBI Report, 1984, p 25)

Thus, it can be seen that whereas the Commit-tee focused its attention on banking operations,i.e., the task, the organizational structure of banks,and the technology, or the procedures, it failed totake into account the effects and implications ofthe task change on the other variable, namely, thepeople of the organization.

The new work technology envisaged in theRBI report requires changes in the way people aremobilized for work as well as in the skills and be-haviours that are critical for productivity. Sincethese are inter-related, the concept of new worktechnology, its social organization, and the re-sponses of individuals who work with the newtechnology need to be studied.

Organizational functioning is the result of in-teractions among four variables: task, structure,technology, and people. (Leavitt, 1965) A changein work technology or task brings about changes inthe others. The inter-relatedness of the function-

ing of the social and technological sub-systems oforganizations and the relation of the organizationas a whole to its environment have to be con-sidered in this context. (Trist and Bamforth, 1951)

This article attempts.to understand the emerg-ing new work organization and work behaviour ofclerks who operate the machines. It uses a systemsapproach and is based on interviews carried out inthe branches in a city where electronic accountingmachines (EAMs) have been installed. Implica-tions for organizational development have beendrawn.

The EAMs were recently introduced in thecash, credit, and current accounts departments ofselected branches of a nationalized bank. Al-though the departments mechanized are the sameand the brand of machines installed is the same,the performance of the departments differ evenamong branches with comparable workloads. Theimpact of EAMs on branch functioning was alsovaried. The only variable component among the

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Major Recommendations of theRangarajan Committee

Branch-Level Mechanization

Under branch-level mechanization, branches having an

average workload of about 1,000 vouchers per dayshould be equipped with electronic ledger postingmachines with attached memory modules or micro-

processor-based sys tem. This need not precludebranches having a workload of less than 1,000 vouchersper day to implement either of these models, if it isfound desirable from the point of view of customerservices. It is estimated that Stage I will cover about2,500 branches. In Stage II, additional 6,000 brancheswill be covered.

In Stage I, the industry would need about 10,000electronic ledger posting machines with memory mod-ules, 200 microprocessor-based systems and 25 main-frame systems. The investment in hardware would beabout Rs 135 crore.

Training Personnel

Banking industry will need about 40,000-45,000operators and 1,000 systems analysts and programmers.These personnel requirements will largely be met fromthe existing staff. Training of operators and program-mers may be arranged by banks. Training of systemsanalysts should be designed and conducted by the Na-tional Institute of Bank Management.

Role of Indian Banks' Association

The Indian Banks' Association should take the overallresponsibility of planning, coordinating, and imple-

menting the programme of mechanization. It should besupported in this endeavour by government agenciesand other apex-level institutions.

Monitoring the Mechanization Programme

A Standing Committee under the chairmanship of a De-puty Governor of the Reserve Bank of India should be setup by the Reserve Bank to monitor the implementationof the programme of mechanization. The Committeeshould have members drawn from the Department ofElectronics, Ministry of Finance, and the Indian Banks'Association among others.

Role of Department of Electronics

The requirements of branch level mechanization shouldbe met indigenously. In the context of large scale re-quirements of equipments, it is necessary to create suffi-cient manufacturing capacity and also allow import ofknow-how and electronic parts as are needed. The De-

partment of Electronics should plan and coordinate theactivities of manufacturers of these equipments.

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ciency in complex calculations is no longer val-ued. A sense of this loss is reflected in the res-ponse of one operator:

When we were manually applying interest, we knew whatwe were doing, now everything happens behind the screen,the machine alone knows what is being done.

Emphasis on Efficiency

The activities of machine operators were definedeven prior to the introduction of EAMs, but theactual practices at the branches varied. In somebranches the operator who posted vouchers wouldnot write supplementaries. With the introductionof EAMs, an efficient standard has been set andembedded in" machine programmes. Machineoperators cannot leave a day's work incomplete;the next day's work cannot commence if all theactivities of the previous day are not completed.

Thus, now a new emphasis is laid on the efficientclosing of the day's work.

Effectiveness Assumes Importance

In the new system accuracy has assumed import-ance and successive stages have become moretightly linked. If errors are committed at source,deliberately or otherwise, and go undetected,more time is wasted in detecting and correctingthem at subsequent stages. The result is that oneexperiences tremendous time pressure at the endof the day, one is always afraid that errors might

have crept in at any stage. Moreover, bottleneckscannot be easily accommodated. For example,earlier if vouchers were released late by one de-partment then the work of other departments washeld up and was completed the next day. Suchadjustments are not always possible now. The de-partments are more closely interconnected, andtardiness in one department affects others muchmore severely.

EAMs and the Skills

The EAMs have introduced a new, information-based technology in place of the earlierexperience-based one. Information now appearson a visual display screen; it is, therefore, neces-sary for individuals who operate the machines topay close attention to the screen. Responding tothe information on the visual display screen re-quires increased mental involvement. If the atten-

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tion of the operator wanders, or if his span of at-tention is short, even more errors will be commit-ted while receiving information or responding toit.

Secondly, the operators require someknowledge of how procedures are embedded in

the programmes. An attempt has been made in themachine programme to classify operators' ac-tivities as routine and non-routine. Operators needto know the consequences of various types oferrorscommitted by themselves or othersonboth routine and non-routine activities. Thisknowledge would also help in locating mistakesand help forecasting trouble spots before theymultiply and spread. To do this, apart from theknowledge of the what of a banking procedure, theindividual needs to know the why of it also. Lastly,EAM operators need analytical skills to work effi-

ciently and effectively.

EAMs and the Work Behaviour

Social Interaction Process

Since the EAMs need low temperature and dust-free atmosphere, they are kept in air-conditionedrooms in most of the branches. Even in centrallyair-conditioned branches, they are housed in sepa-rate enclosures with additional air-conditioners.This changed layout has affected social interaction

to such an extent that one has to make an effort toreach those working on the EAMs.

Restrictions on Accessing Information

Earlier, the ledger or the cards on. which data werestored, were available to all members of the staff.They were easily read. Now information is storedon the floppies. Only an authorized person canoperate the EAM and get the information. Thus,availability of information is restricted. Even theauthorized persons need either an operator oroperating knowledge of the machines to read theinformation.

Supervision

Prior to the introduction of EAMs, maintenance ofcordial interpersonal relations among the em-ployees was important for task accomplishment.Employees were used to bantering while doing their

Vol. 11, No. 3, July-September 1986

tasks, paying attention to work through their eyes.But now employees have to give their full atten-tion to the task. Supervision is thus more complexnow. Besides maintaining good interpersonal rela-tions, a supervisor (or manager) has to monitor in-dividual employee's attentiveness too.

Development of New Work Norms

Since the tasks have changed, old work norms areno longer tenable. Employees are developing anew set of norms. In some places, it was found thatthe machine operators' output was lower on EAMsthan on electrical machines. During the in-terviews, it emerged that the machine operatorsfelt that their workload had increased with theintroduction of EAMs. So they deliberately keptthe output low so that it becomes a norm! Onetypical response is given here:

Apart from posting of vouchers one has to do additionaltasks, such as, taking out the supplementaries, list of excep-tional entries, etc. Moreover, the number of accounts hand-led by two electrical machines has now been transferred toone EAM. Accordingly, the number of vouchers that one hasto handle is also more. Further, at this initial stage one doesnot have finger dexterity, and the process of posting thevoucher is lengthy. The EAM vendors say around 400 vou-chers can be posted but in practice one can do only 250 orso.

Influence of Group on Work Behaviour

Group pressure has become more pronounced afterthe introduction of EAMs. The Indian Banks' As-

sociation has entered into agreements with vari-ous employee unions regarding the use ofelectronic machines. Since most of the clericalstaff are members of one union or the other, em-ployees' attitude towards EAMs is determined bythe stand of their respective unions. An indivi-dual's attitude, in turn, determines his perform-ance on the job. Often, due to the fear of isolation,individual employees do not give free expressionto their own capabilities.

Experiences in Other Countries

The changes- indicated in work content, skills ofthe individuals, ami work bahaviour owing to theintroduction of information-based technology aresimilar to those found by researchers in othercountries. Zuboff (1982) interviewed 200 em-ployees at all levels in three different types of or-ganizations (banking, retail, and consumer goods

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is possible that computerization may not beimplemented.

Further, branches where an average of 1,000vouchers are generated daily are usually old andcramped. It may not be possible to provide sepa-rate enclosures and air-conditioning for the EAMson the existing premises of such branches. So, busi-ness of the branches may have to be reorganizedand computers may be installed in specificbranches dealing with a particular business.

Error Analysis

Errors need to be recorded and analysed so that thenature of errors and the stage at which they werecorrected are known.

Training

The objective of the training should be to help themachine operators, officers, and supervisors de-velop a feeling of adequacy in handling the newsystem. The vendors and suppliers would be help-ful in imparting training on how to operate themachine; the in-company trainers have to help em-ployees develop analytical skills and combinebanking knowledge with the knowledge ofsoftware.

Group as a Medium of Change

Groups whose attitudes are to be changed and whoexert influence for change must be helped to de-velop a strong sense of belonging to the same or-ganization, notwithstanding their status differ-ences. Computerization can be a non-zero sumgame; it can be a gain to the total organization.Such a feeling can be fostered with successful im-plementation of computerization.

Involving the Unions in Change

The union members- who accept introduction ofcomputers may be used to have the commitment oftheir members or may be identified as the criticalmass. One may employ various alternatives to ob-

tain commitment. They can be involved, for inst-ance, in problem-finding activities and educa-tional activities such as training and functioningas a role model. A changed behaviour of the leaderis sometimes required to induce a change in thebehaviour of others. Whichever alternative isselected, the objective is to create conditions thatunfreeze attitudes, increase the energy level, and

result in greater commitment.

Since the 1983 settlement with the unions hasexpired and fresh agreements are beingnegotiated, those unions who are opposed to in-stallation of EAMs need to be convinced.

Sharing Information

The need of, plans for, and consequences from thechange must be shared with all relevant parties atthe branch level as well as at the organizationlevel.

In short, this change process has to be ini-tiated and managed at the lowest level. Thestrategies may vary to suit the culture of indi-vidual banks.

In order to cope with the changes in the mean-ing of work, level of satisfaction, pressure of group

membership, and level of performance the em-ployees need to

understand and be convinced of the importanceof the task to be accomplished,

find different ways in which they can accomplish the task, and

use productive work habits in carrying out thetask.

An organizational culture which values goodcustomer service, commitment to quality and pro-ductivity, and increased employee effort needs to

be fostered. An- organization characterized by amediocre or poor performance might have a strongculture, but a strong culture by itself contributeslittle to the success of the organization. What isrequired is a culture that supports key businessvalues. It is this linkage that needs to be developedwith each organizational change that is initiated,such as the one in banking today. If responses arenot monitored quickly and attended to promptly atthe initial stage, the organizational energy will notbe channelled in the right direction. In addition,the basic purpose of mechanization will bedefeated.

References

Bhatnagar, D. (1986). "Some Organisational Ramifications ofComputerisation," Indian Management, 24(2), 32-38.

Elizur. D. (1973). "Adapting to Innovation Jerusalem," C CGotlieb and Boarding, A. Social Issues in Computing. NewYork: Academic Press.

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Gruenfeld, L W, and Folman, F F. (1967). "Relationship amongSupervisors' Integration, Satisfaction, and Acceptance of aTechnological Change," Journal of Applied Psychology,51(1), 74-77.

Leavitt, H J. (1965). "Applied Organisational Change inIndustry" in James March (ed). Handbook of Organisations.Chicago: Rand McNally.

Padval, S M and Naidu, CAS. (1985). "Computerisation in

Indian Bank and its Training Implications" Pro/nan, 14(3),309-15.

Reserve Bank of India. (1984). Report of the Committee onMechanisation in Banking Industry.

Talwar Committee. (1977). Customer Service in Banks .-FinalReport. Bombay : Indian Bank's Association.

Trist. E L, and Bamforth. K W. (1954). "Some Social andPsychological Consequences of the Longwall Method of CoalGetting," Human Relations, 4, 3-38.

Zuboff, S. (1982). "New Worlds of Computer-Mediated Work,"Harvard Business Review, 60(5).

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