and non-instruments. The last mile between corporates and the banks needs to be standardized because large corporates are no longer married to only on

Manoj: What is SAP's view on SLA for financial supply chain and what role does technology play?
Rajamani: Corporates looks at cash management as outsourcing some of their activities, be it funds, collection, payments to a bank, and even today if you see, cash management services are being set up. You will find SLA getting established, between the service provider and the service taker. Today you find the nerve system of financial management of a corporate is definitely being connected to a bank and where working capital is managed / funded by a bank. So the expectation really comes as to what is reflected as an SLA.
Ravi Shankar: The first step actually is to understand the business. If you go and tell the customer I can really do cash management for you, he would say you do not understand my business. If I say I would like to do collection for the agri sector, the government will ask what you understand of the business - do you know where the smallest value comes from, where the value goes to, etc. So, today most bankers here would see the client groups they are addressing and build people skills and industry skills around them and then they work with technology partners to build solutions specific to them and SLA comes after that. Within India itself there are so many defined trade routes which have changed now because companies are moving in a different chain, finding cheaper sources or alternate sources. So all of this is becoming more specialized and every bank today is not saying I am offering everything to everybody.
Pathak: I would like to add that this SLA is still at the stage of evolution. There are no standards and terms and conditions which can be uniformly applied to all corporates - it basically has to be decided on a case to case basis.
Vijay Kumar: The corporates not only have to face competition in India but also internationally. So, now the corporates also want to focus on their core business, so they look forward to the banks to find solution for their payments and collection mechanisms. For that purpose I think channel financing is the best option the banks can provide to the corporates.
Manoj: What are the risk factors or business constraints factors pertaining to online connectivity?
agarajan: With the introduction of RTGS, NEFT and ECS, 90% of corporate customers want everything online. But problems arise when somebody wants, say 10,000 payments to be pushed at the last moment. When this used to happen a couple of year ago, we had to go back to the customer and say that this needs to be done on a piece meal basis only. Also, if it is online, the customer expects more and more MIS from us. Corporates want everything electronically, but still the maturity level is not there because their internal process and our internal process do not mix together.
R Mani: What happened in one case was that the business group came to us and said they want online connectivity. But
when we met their IT team, they come out with a different version saying they didn't want real online connectivity. What they were talking about was a facility by which there will be a download from their ERP, and manually put into transaction in the bank's system - why, because their internal information security team did not allow online connectivity in a seamless manner. So there is a difference in perception between the business teams and the IT teams.
Harshan: At the gate, we are supposed to provide filtrations in respect of AML.
Vispi: We don't actually get access to the server, they create a path and give us a folder, the file comes from there and we pick it up. We too do not want to give them access to our servers. On the business angle, today there are mandates from different divisions within the corporate to connect with banks. Moving from one division to another also requires customization.
Manoj: Cash forecasting, planning, liquidity management - what would you see as a scope for improving corporate banking on these parameters?
Rajesh Lahori: Cash management has always been about liquidity, and liquidity had a credit link, because of the inefficiencies in the system. Technically it's largely a treasury function - its nothing but cash forecasting, planning and liqUidity with overall improvement in local settlement systems. One model for efficient management of liquidity is to concentrate on large towns and large settlement areas where automation has caught on. The other model is large retailers and distributors, who are working on hybrid models which are more zonal and business linked and are a mix of offline and online. Corporates are actually now focusing on building models creating ways and means where partners, technology players or banks are able to aggregate that and give them something on a common platform rather than talking to multiple entities.
R Mani: Yesterday I was pleasantly surprised when a small PSU was talking about online connectivity. Unlike some of the other large corporates, they are ready to operate on a real time basis, they are even ready to make some changes in their own systems, even those PSUsin tier 2 and tier 3 towns.
Vipul: Credit forecast is generally for corporates where the amount is too high. If you look at the telecom business, where there is a huge customer base and individual payments are very small, there to go for credit forecasting is really a big task.
Manoj: Banks are into variety of adVisory services. Can we use business processes and technology to take one step further,