introduction of technology. the intermediation costs of banks in india still tend to be higher than those in developed banking markets. table 1 key indicators of earning and expenses of scheduled commercial banks, in per cent year net interest margin operating costs to total assets urban + metro business / total business ( % ) deposits per account ( rs ) advances per account ( rs ) 1. 97 2. 77 68. 56 2688. 77 11818. 12 3. 37 2. 65 64. 50 6412. 48 20757. 03 2. 95 2. 68 68. 26 19898. 01 84618. 76 2. 63 1. 87 77. 63 59217. 32 258751. 28 source : statistical tables relating to banks in india, various issues. 14. yet, the question remains how far has the customer benefited from this increase in income of banks. i would like to say that very little of the benefits earned by banks in today ’ s liberalised environment have been passed on to the customers. there is enough empirical evidence to show that the cost of small transactions has not gone down. i will give only one example of low value draft issuance charges. unless low - value transactions are costeffectively done, it is not going to impact efficiency drastically. 15. as regards actual measurement of transaction costs, there are almost no studies which actually quantify in a systematic way the exact level of costs in financial transactions from a customer ’ s point of view. incidentally, i would like the iba to look into this issue and initiate studies on a regular basis for understanding the cost of transactions for small and retail customers. 16. have we been successful in using technology to make things easier or convenient for the customer? no doubt, technology has the potential to extend in a cost effective manner the penetrative reach of banking services and products to a large section of the excluded society. but let us look at some of the critical indicators for access to finance and performance and efficiency of banks in india along with benchmark indicators for selected high - income oecd member countries that are given in annex table 1. the penetration indicators reveal that there have been improvements during 200108 but is still very adverse as compared to oecd economies. 17. is it any easier to open a deposit account? can a person get a loan easily and quickly? i have numerous anecdotal evidences including the one by my domestic help who in a metropolis like mumbai,

- centric technology must be implemented with the customer in focus. technology must enable customer facilitation in terms of cost, time and convenience. it should be dovetailed to customer needs and expectations. in sharp contrast, technology implementation in our public sector banks appears to be more for regulatory and policy compliance. this has oriented the banking technology to be more employeefriendly rather than customer - friendly. c ) business process re - engineering was not done business process re - engineering integral to leverage manpower for business growth and increased profitability, and cetirus paribus to derive optimum benefits of technology up gradation, has not happened at the desired pace. globally, post technology adoption, only 10 per cent of the banking staff is involved in “ back office ” jobs and the remaining 90 per cent of the banking staff are freed for performing “ front office ” jobs of customer acquisition, servicing and retention by ensuring customer loyalty. the net result was tinkering with parts rather than the needed systemic overhaul that could have been achieved had the banks adopted a planned transformational management system. d ) absence of simple cost effective delivery model we are yet to put in place a cost - effective, decentralised and realistic delivery model. fledgling delivery models are being tried out experimentally. fixing a problem / glitch when it happens is the weakest link. this issue is even more important considering that increasingly larger number of hitherto un - banked people will interface with the banks through hand - held / mobile front - end devices. the credibility of the entire system will be at stake and take a hit if the problems are not promptly resolved as they arise and real time solutions are not proffered. e ) information and technology was segregated there was no business and it plan to leverage technology for increasing business and profits. it should help banks not just to deliver robust and reliable services to their customers at a lower cost, but also generate and manage information effectively. information comprises data collected based on principles of integrity, reliability, and accuracy. banks are collecting humungous quantities and warehousing volumes of data relating to customers and transactions. the information is not subjected to meaningful analysis, usage and creation of a database with an objective to meet not only the diversified internal and external mis requirements but also using this information to increase the volume of profitable business using unique techniques of customer relationship management ( crm ). it would not be wrong to say that “ information ” from “ information technology ”