“This year, we have put a budget of around ₹2,000 crore on the IT side, so that we are able to transform the bank into a fully technology and digital-driven bank. For FY25 also the budget was ₹2,000 crore, against which we spent 85%,” the bank’s MD Rajneesh Karnatak, told ET.
This amounts to nearly 12% of Bank of India’s total operating expenditure but only 2.5% of the total income for FY25. The bank’s operating expenditure jumped 13% YoY with cost-to-income ratio falling slightly to around 51%.
While Indian banks have enhanced IT budgets in recent years, it remains lower compared to global peers. A report by Boston Consulting Group in August 2024 had said that global banks typically invest 7-9% of their revenue on IT systems, while Indian banks allocate only up to 5%.
Analysts say that public sector lenders are also seen lagging behind private peers when it comes to technological adoption. Though Karnatak refuted this and said that a big differentiator between a private bank and a public sector bank was there, say, 10 years ago. It is no more the case and PSBs also very robust technology and cyber security platform.
Karnatak, who took charge as the bank’s chief in April 2023, has focused on a slew of digital initiatives with an aim to bring in more business as well as achieve operational efficiency. For instance, in the second half of FY25, Bank of India automated 16 processes, which helped the bank save nearly 12,000 manhours. “We are doing a lot of automation of the tasks, which are very routine.”The bank added 5,200,000 customers on its mobile banking application in the previous fiscal, taking the total to 9 million.
