Mumbai, November 2: The Indian Banks Association (IBA) has shortlisted Mckinsey, Arthur Andersen and Price Waterhouse to undertake a recast of the organisation.The premier bankers' body which has been groping in the dark, faced with an identity crisis, will rope in one of the consultants to help it emerge with a stronger identity. With the first phase of financial reforms over, the IBA will have to get its act together before it is ready to face the second phase of reforms in the country. The IBA is trying to give itself a new role and reclaim lost ground in the new liberalised environment."It will have to restructure itself if it wants to regain its lost position", a senior banker said. "In the changing scenario, the role of IBA will also change. It is gearing up for the next stage of reforms in which the focus is on internal restructuring of banks", a senior IBA executive said. The State Bank of India has already implemented a restructuring exercise on the advice of Mckinsey, while Bank of India is in the process of implementing a restructuring exercise undertaken by Coopers & Lybrand. Dena Bank has hired the services of KPMG Peat Marwick for a restructuring programme and the Industrial Development Bank of India has restructured the organisation on the advice of Booz Allen & Hamilton.

Four of the weak banks -- Indian Bank, Uco Bank, Central Bank of India and United Bank of India -- have roped in Icra to formulate turnaround strategies. The banking sector has entered the second phase of financial sector reforms and with the economy fast opening up, banks will have to prepare themselves for the new challenges. They will also have to get themselves ready for capital account convertibility. The first phase of reforms in the banking sector focussed on asset classification, income recognition norms and helped banks clean their balance sheets. "The banking sector will now have to put in place the infrastructure, technology and manpower to reap the harvest of liberalisation. The IBA will help them achieve these goals", IBA chief MN Dandekar told this paper in an interview last month. IBA already runs a shared payment network system (SPNS) with a network of nearly 150 automated teller machines. There are nearly 40 banks availing of the SPNS facility.The IBA had recently decided to formulate a "code of ethics" for its member banks. The objective is to put a cap on unfair practices indulged in by banks. The decision to codify the conduct rules was was taken at a recent meeting of the association.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.