TCS, SBI to form 51:49 tech JV for banking

Mumbai, Nov 14 | Updated: Nov 15 2005, 06:06am hrs
The country's largest software exporter, Tata Consultancy Services (TCS), and the country's largest commercial bank, State Bank of India (SBI), came together on Monday to announce a joint venture (JV) in the technology space for the banking domain.

TCS and SBI will have a 51% and 49% stakeholding respectively in the new venture to be called C-Edge Technologies Ltd.

The JV will have an authorised capital of Rs 40 crore and two directors each from SBI and TCS on the board. The chairman of the venture will be SBI chairman, AK Purwar, while K Kumar, who is currently TCS, head-BFSI Delivery (Mumbai), will be the CEO. The managing director will be appointed by the board, once it is formed.

Commenting on the JV, TCS CEO and managing director, S Ramadorai, said that the focus of the JV would be on implementing FNS banking products as a systems integrator.

The JV will also provide high-end domain consulting and will create knowledge both in the IT and BPO space.

TCS plans to built niche capabilities in the banking and finance domain both nationally and internationally through C-Edge, Mr Ramadorai added.

TCS has been on an acquisition spree. Last month, TCS acquired the Australia-based banking products firm, FNS, and last week it announced the acquisition of the Chile-based Comicrom in the banking and pensions vertical. Revenues for TCS from the BFSI (banking, finance and insurance services) constituted 42% of the overall revenue and the company has termed it "an extremely important growth area on a global basis".

The primary customers for the JV will be Indian banks, including SBI, and overseas banks. It will leverage SBI's domain expertise in providing Basel II and Sarbanes Oxley and operational risk management consulting services.

Commenting on the its part in the venture, Mr Purwar said, "All our branches are computerised and we are now implementing core banking. 6090 branches have been covered so far making it the largest core banking solution implementation in the world." SBI has close to 2000 professionals experienced in IT implementation.

Depending on the nature of the project, some of them could be deputed to work in the JV, according to Mr Kumar. The JV expects to be profitable in 2-3 years of operation.

MEETING OF TWO MINDS
TCS
SBI

Employs over- 50,000 consultants
Has a presence in 33 countries
Acquires Australian banking products co, FNS, in Oct
Acquires Chile BPO in life and pensions, Comicrom, in Nov

Has over 13,800 branches, along with associate banks
Has country's largest network of 5500 ATMs