The solution had been customized over a period time with the required controls evolved and put in place to support the internal users to get accurate

about the creditworthiness of our customers and the system was modified to generate such reports. It is also enabled to have images."
The system is configured to work both as a centralized system as well as a decentralized system. This is mainly because some of the company's processings are carried out at branch levels. The system works on Oracle database which is run on an IBM AIX machine. The front-end of course uses Windows but developed using Oracle forms technology. NetApp is used as storage technology.
Union Bank of India is perhaps the only public sector bank to have fully implemented a loan automation system. The system takes care of, in the true sense of the term, the entire process of loans to customers - loan origination, processing, risk analysis, appraisal, servicing and post disbursal control. It enables personal and commercial lending. The bank's officers function in a truly automated environment. The system is fully integrated with the core banking system and covers the entire loan life cycle.
LAPS
Says T.K. Srivastava, DGM - IT, of the bank: "We bought LAPS (Lending Automation Processing System) from a firm in Chennai, SysArc Infomatix. We then carried out the required customization. In addition, we have also subscribed to Crisil's rating service in order for us to be able to evaluate the corporate customers. Wipro had been the system integrator. As far as I know, Union Bank of India is the only public sector bank in the country to have an end-to-end loan automation system. Every perceivable type of loan that is sanctioned by the bank is through the system now. We began work on automating the loan system sometime in 2007 and by 2008 December, we were online. Today, the entire process of loans - documentation to execution to monitoring to NPA management - is done through the system and all types of loans - corporate, SME, retail, personal, vehicle, agricultural, etc - are processed and serviced through the system. The system also helps in the recovery proceedings and generates EMI alerts, default notices and even legal notices. What is more, it has facility to have a list of approved lawyers and the bank branches have to mandatorily send the legal notices to defaulters through these approved lawyers. The system is available at all our braches and some 5,000 users can log on to it at any given point of time."
Mahindra & Mahindra Financial Services, a non-banking finance company with a focus on the rural and semi-urban sector and which finances utility vehicles, tractors and cars, is using loan automation system in order to serve its predominantly rural clientele in a more efficient manner. "The system enables us to have swifter deployment of the existing business and new business," says Suresh Shanmugam, national head - Business Information Technology Solutions of the company. "It also helps us to collect customer information in the rural areas and make it available across the enterprise so that we can be competent, we can extend our relationships with the rural customers and
serve them more effectively and almost in real time," he adds.
It is a centralized system, says Shamugam. The information is captured through a distributed network of branches. There is a defined workflow which facilitates easier and quicker decision making. The solution had been customized over a period time with the required controls evolved and put in place to support the internal users to get accurate information.
The company opted for an off-the-shelf system but made extensive customization. It is an end-to-end system and is capable of proViding MIS to top management on NPAs, liqUidity, etc. It is also capable of monitoring the repayment schedule through web-based intranet and internet solutions.
REPORTS GENERATION
Bank of India is now in the process of automating its loan system.
The bank too has just acquired LAPS from SysArc Infomatix and is about to commission it. When fully implemented, it will be an end-to-end and totally integrated system for loan management in the bank, says Saraswati Shankar, DGM - IT, of the bank. "We will also implement a rating system alongside," she adds.
One of the significant advantages, according to Saraswati Shankar, is the facility in the system to proVide reports of various nature to the Reserve Bank of India. "In the existing dispensation, we need to prepare these reports manually, which is a cumbersome process involving manpower and time. When the system goes online, the reports will be generated from the system, which can also be seamlessly transferred to the RBI without any manual intervention. In addition, we will be providing data on individual loans to agencies like CIBIL and we in turn, will be using the credit information proVided by these agenCies."
She said the bank will be basically using the system for loan application processing, sanctioning, disbursement and monitoring.
Similarly, Vijaya Bank too has procured an automated system and is in the process of implementing it. The bank is customizing the package to suit its needs, both in the spheres of corporate and retail loan processing areas.
"The system is designed to capture details required for processing the loan proposal and it does support the tasks till sanction," says Subhash Chander Kalia, executive director of the bank. "Once the loan is sanctioned, it has built in interface to create customer 10, open the loan account in the CBS system."
Kalia explains that the bank offers loans for various purposes ­agriculture, SME, exports, retail, housingetc - with variations built in as per the purpose and nature ofloans applied for. "Applications in the system are designed to capture comprehensive details of the customer based on which a master is created. Ground rules are built into the system for online support at the appraisal stage and the system then gives triggers as to the eligibility of the customer. It has got high efficiency, largely due to its single point processing capabilities. However, delinquency is not captured in the system as it is basically for processing and sanctioning