Financial Powers Delegation
In the financial sector like banks, various approval levels exist right from the junior level up to the CEO of the bank. Delegation of Power (DOP) is the power limit provided to an employee on the basis of which they acquire approval rights. These rights are predefined as per the employee hierarchy. A chart containing the hierarchy of officials with powers for various approvals and various processes are built into a system say HRMS.
A human resources management system (HRMS) is a form of software application used by businesses that combines a number of systems and processes to ensure the easy management of human resources, business processes and data. Few examples of these functions are storing employee data, managing payroll, recruitment, employee performance management, etc.
The main objective of this process is the management of officials in the bank and the powers allotted to them along with handling the financial and economic risks at the wider level.
- The idea behind the DOP system is that there has to be a single official in the bank (or a board of directors) who is responsible to approve proposals or delegate powers to responsible officials for exercising the right to approve proposals for
- making investments
- incurring expenditure
- discounting receivables, etc.
- This process includes a cumbersome amount of data discrepancies when maintained manually since the number of employees is large and the hierarchy level is complex. If not maintained properly, it can directly affect the grading system of the bank.
- Involved resources need an ample amount of time for file preparation as data is discrete and distributed.
- If required inputs (details regarding delegation) are not received on a timely basis then it leads to delays in official tasks & can have a domino effect on financials.
End-to-end processing of this process requires the intervention of three teams as follows:
- IT team acquires data of employee details information from HRMS DB on a daily basis and sends this file to VMT.
- VMT (Vendor Management Team) receives mail requests of employees from any retail /corporate branch of the bank for ID creation/modification/rectification. VMT team compares the new data with the old data for analyzing changes that occurred in the employee hierarchy. Based on the HRMS DB output, DOP creation is initiated for the file with the latest requests.
- The operations team on a monthly basis provides master dump data to the VMT team. This dump contains information about different level heads and power limits allocated as per employee job profile. VMT team uses these files for DOP creation.
- Since the data received from various employees is confidential, the IT team makes cryptographic codes for the outputs using encryption software. And then the VMT team uploads encrypted outputs onto the HR system of the bank.
- SheetKraft extracts the employee data from HRMS DB and master data from SheetKraft DB for processing of HRMS & DOP outputs.
- Activity logic is set as per pre-defined rules provided by VMT users using SheetKraft.
- After applying checks & calculations as per pre-defined logic SheetKraft prepares encrypted outputs as well uploads them in the HR system.
- Using SheetKraft, the entire end-to-end process is completed in 15-30 minutes whereas the manual process used to take around 8 hours.
- Manual hindrance for performing the check conditions has been automated leading to no manual errors.
- As end-to-end activity run is scheduled for auto-run on a daily basis, user dependence is extinct.
- Refer to 4.6.2 section for more information on Delegation of Power- Master Circulars