IOB to float subsidiary to offer IT solutions

Public sector lender Indian Overseas Bank (IOB) today said that it has proposed to float a subsidiary for providing IT solutions to various banks in the country.

"We are likely to come out with a separate subsidiary to provide IT software and implementation to other players like cooperative banks in India and abroad...," IOB Chairman and Managing Director M Narendra told reporters here.

"IOB has its own system and software in terms of mobile banking, and in terms of ERP solutions we already have our footprint...," he said after a review meeting here.

Normally any bank had to purchase IT solutions like Finnacle, Bank 64 for providing banking services. However, we have developed our own programme and have planned to offer it through our subsidiary...," Narendra, who recently took over as the Bank's CMD from S A Bhatt, said.

By offering this service, the bank would be able to make Rs 300-Rs 400 crore.

IOB has sought approval from the Reserve Bank of India for floating the subsidiary and once it is granted it would partner with a technological vendor for offering the services to the customers, he said.

"We have provided the Expression of Interest about one month ago... We will be holding 51 per cent stake in the subsidiary while the vendor will have the remaining...," IOB General Manager (IT) M S Raghavan said.

Stating that the Bank's IT department had a strength of over 250 people, he said the hardware investment (for offering the service) is around Rs 45 crore.

He expressed hope that the subsidiary might come into being in the next two-three months.