Finance

The system lacks input control and input validations as detailed below:

• In the pre-appraisal/technical appraisal menu, data keyed in was accepted by the system, without any validation checks like

• sanctioning of loans beyond the maximum prescribed limits;

• cases of security offered;

• jurisdiction of the branch sanctioning the loan; and

• Promoter’s contribution below the minimum prescribed for various schemes.

Recommendations

• The Corporation needs to rework its entire strategy towards computerization to harness true value of IT in not only enabling business but in improving processes.

• Proper input, processing and output controls need to be implemented in the organization. It needs to fine tune the validations to bring them in line with manuals/circular instructions/lending policies.

• It needs to formulate and document an IT policy immediately

Conclusion

Structured efforts at computerisation of IT activities would have enabled

the Corporation to have a transparent, efficient and effective system to

facilitate all aspects of loan appraisal, disbursement and monitoring.

However, due to lack of properly directed efforts the Corporation still has

a mix of manual and automated process with key areas still being manual,

and thus not free from error or discretion. Moreover, the application

packages lacked in-built controls and validations to safeguard against

incorrect data entries and proper processing of data with the effect that

the information generated by the system was not reliable in many areas.

Thus, even after spending money and valuable time, the Corporation has

not been able to use IT advantageously to bring in transparency and

efficiency. This is a serious short coming in an organisation that

disburses over Rs.300 crore annually as loans.

KARNATAKA STATE FINANCIAL CORPORATION

H.O: KSFC Bhavan, No.1/1, Thimmaiah Road,

Near Cantonment Railway Station,

Bangalore. -52.

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