SBI to rope in TCS for IT joint venture

State Bank of India (SBI) is likely to join hands with Tata Consultancy Services (TCS) for its proposed infotech venture.

According to sources, SBI and TCS will be hold 50 per cent stake each in the venture. A memorandum of understanding (MoU) is expected to be signed on this before the end of the fiscal year next month.

Senior officials of both SBI and TCS refused to comment on the development.

SBI has been planning to float the infotech subsidiary over the last two years. Initially, the Reserve Bank of India was reluctant to give its nod for the initiative as it was not part of SBI's core banking activities.

Even after getting the clearance from the banking sector regulator, SBI has been taking time to finalise its plan as it was looking for a partner for the project.

"The bank and the IT company will hold 50 per cent stakes each in the infotech venture. TCS may manage the operations," sources said adding that discussions are on to finalise the size of the equity base, etc.

The infotech subsidiary will initially act as the back office for over 14,000 branches of the SBI family. In due course, it will work for the entire industry developing banking software products.

TCS has been implementing the centralised banking system for all branches of the SBI Group. The initiative would cost the bank around Rs 700 crore.

The solution set for the centralised banking system includes BANCS from Financial Network Solutions (FNS), Eximbills from China Systems and the existing legacy solution of the software company. TCS has also been appointed by SBI as the prime systems integrator for the core banking and trade finance technology solutions.

TCS had been running pilot projects of each of the solutions at select branches across the country.