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SBI-TCS joint venture helps rural banks go online

The Times of India:  March, 2011

Mumbai: Even as large banks spend hundreds of crores on their core banking software to bring anywhere anytime banking services to customers, a little-known joint venture between State Bank of India and TCS is making the same technology available to rural banks and small cooperative banks at a fraction of the cost.

As many as 4,200 branches of 52 regional rural banks and cooperative banks have managed to go live on a core banking platform without any major investment. These entities include a seven branch bank in Nagaland and a 20 branch lender in Jammu & Kashmir.

C-Edge, a joint venture of the country's largest bank with TCS, is using the application service mode to make available to small lenders the same BaNCs 24 core banking software used by large banks like State Bank of India, Central Bank and Indian Bank. Once the banks transfer all their customer information to the central database their customers can withdraw money from ATMs and send money instantly to other branches.

"One single server of ours in Mumbai is hosting databases of all these 52 banks. The branches have to take care of only the desktop computers and we take care of the entire software, the networking and the hardware from the branch router onwards" said Krishna Kumar, CEO, C-Edge. Besides the central server, the data is stored in a separate disaster recover centre in Bangalore

"This is possible the first example of cloud computing in India. Given the shared infrastructure we offer a start-up bank can offer a whole suite of products to customers from day one" said Mani Mamallan, chief marketing officer at C-Edge.

What this means for the banks is that even the smallest rural lender can provide its customers ATM and remittance services which was hitherto not possible. "Besides the benefits to the customers, we also take the responsibility of generating statement for MIS reporting and generating reports for the regulators. The other advantage is in preparing their balance sheets and annual results. With a core banking solution it is possible for a bank to generate its balance sheet on a daily basis.

Addressing the economics of the technology is only one of the aspects that C-Edge had to address. According to Kumar there were a host of challenges. "To begin with most of the branches were completely manual. The staff required training and there was a need to provide a helpdesk in local languages" he said. Over time all these issues have been addressed, but one challenge that continues to hamper is the availability of power. "We are talking to companies that are in solar power generation to put in low cost equipment that will run at least one computer during a power failure" he said.