State Bank of India


Of particular note was the deal at State Bank of India. It came in May 2002 via FNS’s long-standing relationship with TCS. The system selection was one of the largest and longest-running in the region, and the real question was whether any decision would be made at all, with several previous selections ending inconclusively. It looked at one time to be swinging in favour of FNS’s main rival, Alltel with Systematics, but finally went TCS/ FNS’s way, apparently on the strength of the former’s track- record in banking projects, and the latter’s success in the most recent round of benchmark tests. Koram Bank was used as a reference site.


SBI is the country’s largest bank. It is government-owned and had a 20 per cent share of all deposits and loans capital in its home market. Along with the regional subsidiaries which make up the State Bank group, it had more than 13,000 branches, plus 51 foreign offices in 31 countries including the UK, US, South Africa, Japan and Singapore. The contract covered the whole group, although the initial target was to connect 3000 domestic State Bank branches within the first two to three years, whereupon a wider roll-out would commence. A pilot implementation was promised within a year. It was said at the time of the deal that the international operations might also opt to take the system, either in parallel or after cutover in India was achieved. The bank was seeking to replace a version of Kindle’s Bankmaster/LAN dating from the late 1980s. It wanted to develop its capabilities in customer service, 24x7 banking, delivery channel enablement, product launching and relationship management. CSC’s Hogan system, offerings from Misys, and Infosys’ Finacle were seemingly among the options considered and eliminated, as was the possibility of taking a more up-to-date version of Bankmaster. TCS headed the project, taking charge of project management, systems integration, and implementation. Hewlett-Packard, which was also part of the bid, provided Superdome servers and XP storage systems. In all, the three companies were expecting to devote over 150 staff to the project.


Also included in the project, which amounted to a complete overhaul of the bank’s IT infrastructure, were internet banking and trade finance platforms (China Systems’ Eximbills was taken for the latter), asset liability and payments solutions, and a treasury back office system, all of which were likely to be commercial packages, said SBI’s vice president and programme director, S Balasubramanya. Aside from creating interfaces to the above systems, there was some India-specific development work to cover local regulatory requirements and workflow processes. The system already had a presence in India, thanks to the worldwide roll-out by ANZ Grindlays, so many of the necessary changes were already in place, said Balasubramanya.


Despite this, the project was expected to involve over 10,000 man-days of development, in areas such as money transmissions (the bank handles all payments for government departments, including payroll) and interfaces (of which there


would be over 140). There was also the need for structural changes to Bancs including increasing the size of the account and branch number fields – no small task in a system of this age. TCS was handling all such work. Another Indian company, Thinksoft, was managing the testing. By October 2003, an initial three branches had gone live in pilot mode. This was clearly considerably later than planned but seemed a promising step forward. The three outlets were in the bank’s main centres, with one spanning 1300 staff. Another 17 branches were scheduled to go into pilot in February 2004, after which the bank intended to enter full roll-out mode, comprising 50 per week for an initial 3000, followed by an additional 10,000. These were to include all of the branches running Bankmaster. A clutch of other banks under the State Bank umbrella were also scheduled to go live. By October 2004, 250 SBI branches were live with Bancs, with a new version of the system, including more complex requirements, undergoing user acceptance testing. There was not yet the same level of expertise with Bancs as there was with Bankmaster and there was greater complexity in the roll-out but R N Ramanathan, deputy managing director and head of IT at SBI, said that he was hopeful of reaching a rapid rate of replacement in 2005, with a marked acceleration in the ensuing months. This was achieved so that, by October 2005, 5300 branches were live. By April 2006 the roll-out was continuing apace. More than 7400 branches out of a total of 13,800 were online, so too almost all of the branches of SBI’s seven associate banks. As a result, SBI announced that SBI Connect, the name for its project, had crossed the 10,000 branch mark. There were developments of a different nature in late 2005, with SBI setting up an IT subsidiary. Dubbed C-Edge Technologies, this was meant to combine TCS’s ‘end-to-end delivery capabilities’ and SBI’s ‘domain expertise’, said the TCS-derived CEO designate, Krishna Kumar, at the time of the announcement. C-Edge started with an authorised capital base of Rs 400 million. Based in Mumbai, TCS took a 51 per cent stake, SBI 49 per cent.


By this stage, the decision had been made for SBI’s international operations. This came in mid-2004 and saw Infosys’ Finacle taken for 20 countries. HP gained the deal for the infrastructure to support this. I-flex was on the shortlist, with FNS seemingly not reaching this stage. FNS had gained the nod in India where scalability was a top priority but, said Ramanathan, for the international roll-out, important considerations were the ability of the vendor to implement its system across all locations and integration with third party systems such as those for regulatory reporting, all within an aggressive timescale. While the bank might have decided to standardise on one system at home and abroad, it was felt that FNS and TCS ‘had their hands full on the domestic side’. In the first half of 2004, TCS/FNS won another major


retail-oriented deal for Bancs in India, at Indian Bank. TCS and FNS had to see off the two main domestic players, Infosys and I-flex Solutions, to gain this win.


Universal Banking Systems Market Report | www.ibsintelligence.com 499


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