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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.
As a consultant, it will help with 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.
By doing so, it saved about Rs 300 crore. Now, it intends to cash in on the product. IOB believes that its software would find a market in Asia and Africa.
American Express tie-up
Speaking to journalists on the sidelines of the meeting to announce a tie-up with American Express, the Chairman and Managing Director of IOB, Mr M. Narendra, said that the IT subsidiary could have “technology partners” and the bank would take a few months to identify one.
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.
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