Eventhough both the sides were reluctant to speak formally on the sale of the software products developed by PwC, sources said that the deal has been clinched recently and the formalities would be completed shortly and a formal announcement is expected to be made in early-June.

Prior to its merger with Coopers & Lybrand, PwC had developed a banking industry software which pertained to back office functions in a share custodial division post-dematerialisation--a process which eliminates handling of paper and leads to electronic trading.

A team of 20 individuals formed part of this division. The software was, among others, installed at Deutsche Bank, one of the proactive custodians in a demat regime.

``Once we developed the software, we got a good response from otherbanks as well and more importantly our existing clients were keen on latest versions. In the meantime, we had a global merger with Coopers. In any case, software development was never our core area of competence and post-merger, a conscious decision was taken to leave this function to a software developer and hence the agreement with PSI Datasystems,'' a top PwC source said.

As per the agreement, the intellectual property rights of the product and a team of 20 software developers would be transferred to PSI Datasystems. PwC would, in turn, work with PSI Datasystems in implementing the product.

A PSI Datasystems official confirming the buy-out said that the company would pay a 20 per cent royalty to PwC on the product for the first three years. ``The product is bound to find acceptance among its clients in the banking industry and would help it counter its rivals. This is a unique product catering to a modern stock market. The depository concept is catching on well among investors and banks are seeing agreater role in becoming major players in this new business activity,'' said the source.

Currently, more than Rs 1 lakh crore worth of shares have been dematerialised but this is just one-fourth of the total market capitalisation of the Indian markets.

Most of this amount has been dematerialised by institutions which typically hand over their shares to a custodian for handling. In the past, the job of the custodian was to handle the physical shares. With these shares now merely a book entry, changes in technology to handle these shares was required. The PwC software enables this.

PwC is one of the largest consultants in the world following the merger between Price Waterhouse and Coopers & Lybrand. PwC is a big player in implementation of ERP packages and has tie-ups with several developers. This activity would continue.