TCS, SBI team up for tech venture

C-Edge Technologies to provide technology solutions to financial services sector globally.

The country's largest commercial bank, State Bank of India (SBI), today joined hands with information technology giant Tata Consultancy Services (TCS).

This is to set up an infotech joint venture, C-Edge Technologies, for providing technology solutions to the financial services sector in India and abroad.

TCS will hold 51 per cent in the company but there will be equal participation at the board level. K Krishna Kumar, head of banking, financial services and insurance at TCS, has been named chief executive officer of the joint venture. The company will have an authorised capital of Rs 40 crore and it will recruit employees from outside.

The joint venture has taken shape after nearly a year of negotiations even as TCS was implementing core banking solutions for the SBI group. SBI had started scouting for a partner for the venture after the Reserve Bank of India (RBI) gave permission.

The RBI was initially cool to the idea as it felt that infotech was not part of a bank's core activity. However, IDBI has a wholly owned infotech subsidiary.

SBI Chairman AK Purwar said the market for technology solutions for the banking sector was huge. "The new company will develop high-value niche assets and solutions by leveraging the domain and technology knowledge of both the companies," TCS Managing Director and Chief Executive Officer S Ramadorai said.

According to Purwar, the overseas market for technology solutions is worth $130 billion.

In India, only 25 per cent of bank branches are on the core banking platform and just five per cent of cooperative bank branches are networked. Regional rural banks offer another business opportunity.

The new company will also offer Financial Network Solutions' (FNS) core banking solutions and create transformational capabilities for banks and financial institutions by helping them to use technology as a competitive tool. FNS, which was acquired by TCS recently, is a banking products company based in Australia.

Purwar said TCS had completed the implementation of its core banking solutions at 6,090 branches of the bank. The solutions have been implemented in around 2,500 SBI branches and over 3,500 branches of associate banks. SBI expects to bring all branches of the group onto the core banking platform by the end of 2006.