By Subhankar Kundu @ Friday, March 20, 2009 8:28 AM
| ||Two technology companies have helped drop a major bank in the lurch although the Canara Bank disagreees it's in a mess.The management of Canara Bank that is quite satisfied with the core banking software that Oracle Financial Services Software has provided, the harried employees who think the product is a disaster and the third, the clueless customers of the bank. |
Oracle Financial Services Software, in its early incarnation as Iflex Solutions, in conjunction with IBM, secured the contract to provide the core banking for Canara Bank, one of the largest public sector banks in India.
The core banking software, Flexcube, was implemented in February 2006. A senior employee of Canara Bank, who spoke to ITExaminer on conditions of anonymity, said that the software is riddled with bugs that have resulted in the disruption in the working of core banking branches, customer dissatisfaction and financial impropriety. Complaints include inadequate server capacity that makes the working of core banking excruciatingly slow.
But a senior official of Canara Bank’s IT department contradicts this. He said: “The software has no bugs at all. There is no such problem with the servers either. It’s functioning smoothly across branches. There could be some operational errors which might happen due to the transition from legacy systems to core banking structure. The UAT was conducted thoroughly and we couldn’t find a single area where we can say the vendor didn’t meet the functional requirements provided by the Canara Bank.”
The senior employee, however, begs to differ with managements views. He said: “The user acceptance test (UAT) of the software, which is required to ensure that the functional requirements of the client are met is questionable. Oracle’s core banking solution doesn’t meet the internal accounting norms. Hence bank staff across different core banking branches confronts issues that lead to misappropriation of accounts.”
So can we have a look at the UAT? No. The technical manager refused to divulge the contents of the UAT by claming that it was “an internal matter.”
An official of Oracle Financial Services told IT Examiner , “We provide support to all our clients. So, whenever they had a problem, we always solved it. We won’t be able to comment much on the internal accounting procedures of Canara Bank”.
The are several ‘bugs’ in Oracle’s product that don’t get specific answers from either Canara Bank’s management or from Oracle - accounting errors in the pre-closure of loan accounts or incorrect reflection in the daily balance sheets or the inter-branch transactions, that have been pointed out by employees of the bank.
Our source said, for instance, that the sum of all the transactions in a day at a branch should reflect in the balance sheet. But, according to the source, the amount it reflects in the balance sheet is incorrect.
As an answer, the source said: “When the bank asked Oracle to add a new feature, to introduce general ledger (GL) accounts, they came back with more than 2,500 heads. About $4.4 billion (Rs 22,000 crore) has not been reconciled because of these GL accounts. The software permits fraudulent entries of figures in the GL accounts as the DIT can manually change it.”
As for the infrastructure, the source said: “The data centre has six servers and the entries randomly go to servers. If one server goes down, all the other servers get affected too. Server capacity is for 700 branches but they have connected these servers to 1,300 branches. Hence, the overload freezes operations. Had the UAT been conducted properly, these loopholes would have been identified.”
An IBM official, Mr Murali, involved with the bank agreed to meet ITExaminer and clarify the issues on Monday but subsequently went incommunicado .
While the complexities of transitioning from a legacy system to core banking is understandable, and Oracle has a large enough installed base of core banking customers, the intransigence of the parties to come clean with their versions is unfortunate. X
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