New Delhi, Nov 9: The Punjab National Bank (PNB) will restructure its operations, much ahead of country's plans to switch over to capital account convertibility (CAC) of rupee.

``We are restructuring the entire organisation to face competition in the 21st century after the rupee becomes convertible on capital account,'' PNB chairman and managing director Rashid Jilani said.

A major feature of the restructuring plan will be opening foreign branches in international financial centres as an outlet to raise money at cheaper rates.

A special representative office will be opened in January 1998 at Almatti, Kazakasthan followed by full-fledged branches in some other Commonwealth of Independent States (CIS) countries, Jilani said.

Once CAC comes into effect, competition from foreign and private banks will increase and the restructuring is timed to face the global competition, he said. The bank will take-up the restructuring in four major areas -- human resource, information and technology, business research and training, he said.

Jilani said Punjab National Bank board has already taken presentations from eight management consultancy firms in this regard and by the month-end three firms would be selected for detailed presentation.

PNB will be opening its branches by the turn of the century, but only after a formal board approval. These will be in commercial centres across the world and will not be guided by the concept of ethical businesses, Jilani said.

He ruled out opening branches in places just on the grounds of having high concentration of Indian population.

The bank had earlier five foreign branches in UK, which were closed down in 1984-85 following heavy losses.

Asked why a CIS country was chosen, Jilani said, ``We feel trade between CIS countries and India would be expanding in the coming years and there is also a demand from the Indian embassies in that region. However, according to the rules in CIS countries, no foreign bank can open a branch and can open only a representative office.

Eight consultancy firms - McKinsey, Arthur Andersen, Ernst and Young, Coopers and Lybrand, Tata Consultancy Services, KPMG Peat Marvick, Booze Allen Hamilton and Boston Country group gave presentations before the PNB board.

Jilani said PNB was exploring possibilities of giving the contract to more than one consultant, each on the basis of their strength in a particular area. We will select a firm which has international expertise and has the capability to implement it in Indian conditions.

Jilani said the bank board has not decided the time period for restructuring adding that it will depend on the firm selected for restructuring and the time frame set by it.

Commenting on the impact of restructuring on the financial health of the bank, he said it will surely reflect on the balance sheet in the next few years.

The bank will emphasise on treasury and risk management, the key areas in the banking industry, Jilani said.

PNB would be among the top three banks in the country after the final restructuring process, he said.

The restructuring will also aim at improving operations efficiency through better human resource management.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.