A recent press report said that Indian Overseas Bank has roped in Ernst and Young as a consultant to provide advice on spinning-off the bank’s IT division into a software subsidiary. Ernst and Young will act as a consultant with the valuation of the subsidiary and also help patent the bank’s core banking software.
Unlike most of its peers, IOB did not buy a core banking software (such as Finacle or Flexcube) from the market. Instead, the bank developed its own software and has used it extensively across its 2,018 branches. The bank has saved about Rs 300 crore by developing its own software. The bank has planned to on the product and believes that its software would find a market in Asia and Africa.
Mr.M. Narendra, the Chairman and Managing Director of IOB, told the journalists on the sidelines of the meeting to announce a tie-up with American Express, that the IT subsidiary could have “technology partners” and the bank would take a few months to identify one.
He also said that the tie-up with American Express will help the bank ramp up its credit-cards by 50,000 in the next six months. Currently, the bank has about 40,000 credit-cards with average spend of Rs 72,000 a year. IOB has been making strides in lending in the retail loan segment. Personal loan, Home loans etc are in its product offering