Financial Daily from THE HINDU group of publications
Wednesday, Dec 15, 2004
Money & Banking
Info-Tech - Outsourcing
YES Bank, Wipro Infotech sign 7-year outsourcing deal
Mr Azim Premji, Chairman, Wipro Ltd, and Mr Rana Kapoor, Managing Director and CEO, YES Bank, exchanging documents in Bangalore on Tuesday. G.R.N. Somashekar
Bangalore , Dec. 14
YES Bank has signed a seven-year total IT outsourcing deal with Wipro Infotech, the domestic IT service arm of Wipro Ltd.
The YES Bank Managing Director and CEO, Mr Rana Kapoor, and the Wipro Chairman, Mr Azim Premji, signed the deal in Bangalore.
As part of the deal, Wipro Infotech will address the entire technology requirements of YES Bank's offices, branches across the country and set up a data centre on build, own and operate basis. Wipro will also be the preferred partner for servicing all future technology demands of YES Bank.
"This is the first significant, complex outsourcing deal in Indian banking sector," said Mr Premji.
Both Mr Premji and Mr Kapoor declined to comment on the value of the deal with the Wipro Chairman saying "we don't want to unbundle the price for competitive reasons." However, Wipro Infotech will be charging YES Bank on a pay-by-use basis.
Mr Kapoor said YES Bank would save about 30 per cent in total costs, if it ran the IT infrastructure that has been outsourced inhouse.
"We plan to start between 12 and 30 branches in the next 12 to 18 months, increase it to about 100 by 2008 and add 250 branches by 2010 and another 150 by 2012, assuming that the growth is purely organic," Mr Kapoor added. YES Bank is implementing core-banking solution Flexcube from i-flex Solutions and is also outsourcing the ATM infrastructure to another firm.
We plan to raise around Rs 250 crore through private placement or an IPO over the next six months, he added.
The Wipro Infotech President, Mr Suresh Vaswani, said the deal is the first of its kind.
"We will have about 25 people working initially which will be ramped to over 75,'' he said.
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