LKB has also picked up a 20 per cent stake in Flexcel.
Under the agreement Flexcel will provide contractual services to LKB to deploy, host, manage and rent access to Flexcube centralised software from a centrally managed data centre. “It is for the first time that such a solution has been deployed in the ASP mode in India,” said Flexcel chief executive officer A Rajan.
Speaking at the signing ceremony LKB director Karan Anand said, “We at LKB think that this tie-up will give us an enormous cost advantage and an ability to compete with the new generation private banks. As a business proposition too we saw enormous scope in the ASP model for banking solutions and decided to pick up a 20 per cent stake in the venture.”
Flexcel International, as part of its ASP offering, will provide contractual services to LKB to deploy, host, manage and rent access to Flexcube centralised software, the flagship product of i-flex solutions, from a centrally managed data centre. Flexcel will also implement this software in all the designated branches of LKB spread over 10 states supported by the necessary training and other migration tools for conversion.
The bank plans to expand its network by 25 branches by the end of the current fiscal and take it to 120 branches.
In addition to this Flexcel will offer an ATM switch on an ASP basis to LKB enabling it to offer customers the facility to operate from any of its ATMs. The bank has 19 ATMs, with a plan to add another 50 ATMs in the current year, all of which are standalone as of now.
LKB executive director VK Gupta added that by the end of the year the bank would automate all its operations including retail, corporate, investment and treasury activities and offer anywhere anytime banking to all its customers.
However a few of the rural areas will not be connected as their volumes do not justify the expenditure.
The next step for the bank is Net-enablement and mobile banking. Answering a question Mr Anand said that the bank would go in for its own set-up at a time when the volumes justify the move.