IBM, i-flex bag Canara core banking project

Computer maker and IT services firm IBM has won the bid to implement a core banking solution for Canara Bank. In a deal, which market sources estimate at some Rs 250 crore, IBM will implement Flexcube, supplied by i-flex solutions in some 1,000 branches of the bank.

The hardware part alone will cost Rs 100 crore, M B N Rao, Canara Bank's chairman and managing director told reporters here on Friday.

The IBM - i-flex combination beat competition from multinational rival Hewlett Packard and a desi system integrator, Wipro, both of whom had offered to implement Finacle, supplied by Infosys Technologies, a senior bank official said.

IBM's services business, IBM Global Services, will do the system integration work, said Shankar Annaswamy, managing director of IBM's Indian subsidiary, IBM India Limited.

IBM will also supply all the hardware required for the project. It will build a data centre at Bangalore, where the bank is headquartered, and a disaster recovery centre at Mangalore, the official said.

It will take some eight months for i-flex to customise Flexcube to Canara Bank's requirements. By that time one branch, at the headquarters will go live with the core banking solutions. In the next five months, 1,052 branches will be hooked up.

These branches have been chosen to account for the bulk of the bank's business. They will cover "about 83-84 per cent of our business", he said.

IBM Global services will also undertake to support, on an annuity basis, the new software and hardware systems for another eight years, after they have been put in place. In addition to the core banking software, the IBM led consortium will bring in partners for several other software packages, to handle asset liability management, risk management and so on.

Flexcube will enable core banking in three main areas, retail, corporate and trade finance, a Canara Bank release said. It will offer many of the bank's 26 million customers a shot at "anytime banking" through bank branches, automated teller machines, the Internet and the cellular phone, Rao said.