PMCB Tackles Mounds Of Cheques With VSoft Solution

Imagine a situation where there are mounds of cheques sitting on your desk waiting to be cleared. Even without the slightest hint of a headache a few minutes ago, you would feel its pulsating effect begin as a result of the horror sitting comfortably on the table. This is a scenario, which bank employees across India have faced for ages and struggled with. However, with the advent of technological respites such as the centralised cheque processing system, things are looking brighter for the BFSI sector, which has always been an aggressive adopter of the latest technologies.

As an endeavour to make things simpler with cost reduction bundled in, The Punjab and Maharashtra Co-operative Bank (PMCB) opted for VSoft’s Centralised Cheque Processing System (CCPS). Today, PMCB has 19 branches spread across the cities of Mumbai and Delhi with Rs 1400 crore in deposits and Rs 800 crore in advances with a net profit of Rs 35 crore.

Need for centralised cheque processing

PMCB wanted to relieve its branches from clearing activities. The bank also wanted to centralise its clearing business and concentrate on business development rather than directing efforts towards clearing cheques and data entry operations.

Prior to the implementation of VSoft’s CCPS solution, the clearing process was done manually for more than 20,000 cheques a day at the Mumbai service branch of PMCB. For the bank, this involved a large number of its employees, who were constantly engaged in processing and clearing cheques manually.

Challenges

The data entry of cheque details was a particularly demanding task for the bank before VSoft’s solution was implemented. Challenges of rising cheque volumes coupled with escalating manpower and infrastructure costs and the logistics pressures of managing multiple vendors were the main forces that led the bank to look at ways and means of optimising the clearing process, and in turn, managing costs better.

The bank wanted to improve operational efficiency and cut down costs related to manual processing and clearing of cheques. The bank was also looking to reduce the number of employees involved in these manual processes so that they could be re-allocated to other activities. Further, the bank also intended to improve its customer service capabilities such as quicker funds availability for its customers, which could be realised with an automated clearing process.

The Implementation

The implementation of VSoft’s CCPS solution, including some customisations in workflow, training to the staff and trial runs took four weeks in total. VSoft implemented Outward Clearing in Phase I and Inward Clearing in Phase II; through the Inward Clearing deployment, the bank wanted to capture payee name details from inbound cheques.

During the implementation, VSoft made changes in the workflow and incorporated the Drawee Entry module to facilitate entering of drawee details for each item. This has been made configurable. VSoft also customised the Extract and Encoder file formats as per the bank’s requirements.

Functionalities of CCPS

The integration of VSoft’s CCPS solution with other applications at the bank was seamless. The CCPS solution generates the Extract files for the Core Banking Solution and for the Encoder machine to facilitate encoding of amount.

VSoft’s Centralised Cheque Processing System (CCPS) provides a solution for capturing images of cheques at the point of acceptance or the service branch, processing of captured data and images, and generating files for updating the bank’s core banking system and the power encoder. The system can process all clearing instruments like high value items, demand drafts, postdated items, intercity items, local and branch clearing items.
Benefits

VSoft’s CCPS solution has effectively automated the cheque processing operations at PMCB’s Mumbai service branch. This has resulted not only in availability of more time for the branch to focus on customer satisfaction and other business opportunities but also cut down on the manpower involved in cheque processing. The bank is confident that this will lead to increased customer satisfaction and therefore, additional business opportunities. The bank has been able to minimise the time taken for data entry and extend the time to accept cheques from customers at various branches. PMCB has also implemented VSoft’s Cheque Truncation System (CTS) at their Delhi branch.

The bank has garnered the following benefits from this implementation:

• Achieved a success rate of 70 percent with regard to readability of data from cheques. The solution captures data from the MICR line, Cheque Date, Amount, Payee Name, Account Number and other details on the physical cheque
• All cheque processing operations are centralised
• Reduced manual processing of cheques for clearing
• Cut down manpower required for data entry and to process cheques manually
• Archiving of data and images of cheques for future use has been made possible

Krishna Karanth, GM, Punjab and Maharashtra Co-operative Bank, concludes, “We are very impressed with the speed at which VSoft was able to implement the solution. In addition, the ease of use of the application combined with VSoft’s customer-focused attitude has given us a powerful solution”.