BoB's Finacle mandate may go to H-P

Bank of Baroda (BoB) has chosen technology partners for implementing its core banking solution after protracted discussions.

The bank, which had initiated the idea in 2002, is close to giving the contract to Hewlett-Packard (H-P) for implementing Infosys' core banking solution package, Finacle.

BoB is expected to enter into a five-year contract with H-P. The bank's board has given clearance on technical grounds; pricing negotiations are yet to take place, said industry sources.

Industry sources said the total cost of the deal could run into close to Rs 1,000 crore for technology implementation for the next three years, making it the largest technology deal in the Indian banking sector.

The public sector bank, which has a network of over 2,700 branches, does not intend to connect the entire network. It will start with 22 pilot branches by December 2004. These 22 branches are spread out across India and overseas, making BoB the first bank to implement the same software connectivity package across countries.

By December 2005, the bank aims to connect as many as 488 branches which will cover 70-75 per cent of the business volumes. By December 2007, the bank aims to network 1,979 branches.

The remaining branches are mostly rural branches, many of which are not computerised due to severe power, telecommunications and connectivity constraints.

The bank has decided to manage the software in-house in the long-term. This will ensure that the bank possesses ownership rights and the power to change the service provider, H-P in this case, when required.

IBM, in partnership with i-flex's 'flexcell' and Tata Consultancy Services, were the other main contenders for the mega project. Bank of Baroda has tied up with software research and advisory major, Gartner to chart out its `business transformation project'.

The project includes not just implementation of the core banking solution but also end-to-end suite of applications for global treasury, Internet banking, tele-banking, customer relationship management, data warehousing among others.

This is part of the plan to rebrand the bank to keep the customer base growing and prevent attrition to more technology-savvy banks.

Another large PSU bank, Bank of India has recently embarked on the implementation of its Rs 550 crore, core banking solution with H-P and Infosys. It has started networking two of its branches on a pilot basis. The bank aims to connect all its 2,560 branches by March 2007.