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IDBI BANK LTD

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by

Ritanshu Kashyap

on 1 September 2013

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Transcript of IDBI BANK LTD

ABOUT IDBI BANK LTD
IDBI is a development bank, established in 1964 with a primary purpose of facilitating the development of Indian industries. Presently, it has 1100 branches and 1700 ATMs across the country
STRUCTURAL ANALYSIS
MILESTONES
ORGANISATION STRUCTURE: 2008
HORIZONTAL RELATIONSHIPS
CLIENT SIDE PROBLEMS
Long and cumbersome process for entry of clients into IDBI services

Ambiguity-
Sub-units of large conglomerates dealt with by separate departments
Turn-over based categorization, which changes with time

Accessibility- IDBI branches not accessible to SMEs in remote areas

1964,1st July -Industrial Development Bank of India (IDBI) set up as Development Financial Institution


2004, 1st Oct - Industrial Development Bank of India Limited, (IDBI Ltd.) a new company incorporated as a Government company


2005-Merger of IDBI Bank Ltd with IDBI Ltd to ensure increasing growth rate


2006, 3rd October -Merger of United Western Bank (UWB), with IDBI Limited

2008- Change of name of IDBI Ltd to IDBI Bank Limited; performing twin duties of a bank and a financial institution; merger of SMEs into retail banking and restructuring.
DOMAIN AREA
Personal Banking: Liability Products, Asset Products, NRI Products

Corporate Banking: Letter of Credit, Bank of guarantees, TUFS

Priority Sector: MSMEs, Agricultural Financing
MINTZBERG MODEL
IDBI: Professional Bureaucracy
Function Dominated Network Model
Information Systems and Direct Contact used by IDBI Bank Ltd.
MECHANISTIC STRUCTURE
CULTURE
OVERALL MISSION STRATEGY
ENVIRONMENTAL UNCERTAINTY
KNOWLEDGE MANAGEMENT:
EXPLICIT
NEW STRUCTURE
PROBLEMS IN EXISTING STRUCTURE
INTRA-ORGANISATIONAL
CONFLICTS
Departments fighting over client portfolios

Departments fighting over large conglomerates

Clients expressing concern over organisational conflict
Corporate banking was now a single consolidated sector
SMEs were brought under retail
NEW CAPS:
SMEs: Investment in assets less than 2 crore
Corporate: Investment in assets more than 2 crore
RESTRUCTURING
Given all the problems that existed in the structure, a new organisational structure, as proposed by McKinsey, was put into place
SUMMARY
ADVANTAGES
RECOMMENDATIONS
1. Further division of the Corporate Banking Vertical
Due to heavy work load presently
The aforementioned division could be done on the basis of:
Existing clientele
Large and Mid Corp

2. Change in categorisation criteria
Term Loan Requirement
Market Capitalisation

3. Formation of Project Team
In order to enhance communication across hierarchy
PROBLEMS FACED DURING
TRANSITION
AGENDA
1. Introduction about IDBI Bank Ltd

2. Milestones and Vision

3. Domain Area

4. Structural Analysis: 2008

5. Problems with existing structure

6. New Structure

7. Recommendations

8. Learning and key takeaways

ADVANTAGES AND CLIENT
FEEDBACK
MEASURES TAKEN BY IDBI
KEY TAKEAWAYS
ISSUES FACED
Non-disclosure of client information

Unable to disclose the precise nature of conflicts and power

Most occurrences dated back to 2008 - a long time ago
Intervention by Senior management to convey organizational goals

Facilitation of communication between various levels of hierarchy

Workshops and training sessions to fill the skill gap
PROCESS
Full transcript