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SBI to enter information technology business - Views on News from Equitymaster
 
 
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  • Jan 11, 2000

    SBI to enter information technology business

    SBI has plans of entering the information technology business. This venture is aimed at giving the bank access to better technology to increase its efficiency levels.

    SBI (FY99 total income: Rs 19.11 bn) is India's largest bank. It runs the world's largest network of 8,900 branches and controls about 22% of India's loans and deposits.

    The main tenets of this are: 1) SBI has earmarked Rs 5-7 bn investment for its information technology business in the next three years. 2) The proposed information technology joint venture to eventually expand into non-banking products. 3) SBI will examine presentations made by leading consultants for formulating a technology plan for ten years.

    SBIís information technology foray will first address the infotech needs of SBI and its seven associate banks and will later on be upgraded to a joint venture company. This joint venture will not only take care of SBIís needs but will execute contracts for other banks, as its product will be of relevance to them too.

    This joint venture will enjoy the benefit of SBIís captive needs and its brand equity. The major concerns for SBI has been its low level of computerisation. This step will definitely help SBI become more technology conscious and will also improve its competitive strength as against other new private sector banks. SBI has been currently loosing its market share mainly due the technological advantage which some of its competitors have.

    Market View:
    The improving economy and the steps taken by SBI to counter its inefficiencies has made many analysts turn positive on the stock.

     

     

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