Mumbai, Nov 14
TATA Consultancy Services and State Bank of India have formed a joint venture company C-EDGE Technologies Ltd that will offer technology and consulting services to the banking, financial services and insurance industry (BFSI).
The 51:49 partnership between TCS and SBI, targeting the BFSI sector is a surprise of sorts. TCS is associated with SBI as vendor for rolling out a core banking solution for the latter. Also, TCS last fiscal had nearly 35 per cent of its revenues coming from the BFSI vertical.
On SBI's part, the bank itself had for long been mulling an IT services division/subsidiary of its own.
But TCS' recent acquisition of Australia-based FNS (whose core banking solution it is implementing for SBI in the largest core banking rollout in the world) probably expedited plans for a joint venture between the two.
Major collaboration: "This is the first major collaboration between the two world-class banking and technology behemoths and will reinforce TCS' articulated strategy of becoming a full services player and growing our dominant position in the global BFSI domain," said Mr S. Ramadorai, CEO and Managing Director, TCS, at a news conference here today.
"The new venture will also play a key role in deploying FNS products in the role of a preferred systems integrator and leverage the experience both organisations have gained in the core-banking rollout in the State Bank group," said a joint statement from the partners.
Core banking: Around 2,000 SBI employees are involved in the core banking solutions rollout and 250-300 employees from TCS. Many of the new employees at C-EDGE could be from this set of people.
"SBI has built huge implementation capabilities and domain knowledge of banking. We propose to put a value to these implementation capabilities," said Mr A.K. Purwar Chairman, SBI. "Most importantly we would like to take this to a global level."
Board representation: TCS and SBI will have two representatives each on the Board of C-EDGE, which will likely have Mr Purwar as Chairman, said officials at the conference. Mr K. Kumar, who headed BFSI (Delivery) at TCS, will be the Chief Executive Officer of the company.
C-EDGE will be located in Mumbai and will start operations as soon as the formalities for its incorporation are complete. In about three years' time, it would scale up to employ 1,000 persons, said Mr Kumar.
As to whether TCS' BFSI practice and C-EDGE might have to compete for Projects, Mr Ramadorai said they are absolutely clear that there will be no conflict between the two.