Readers might remember that SBI Caps had floated the RFP for the IT Infrastructure for India’s newest Bank i.e BMB.
In a first by Indian Bank, BMB plans to adopt the Per-Usage Payment System for its IT infrastructure model.
The Per-Usage Payment System is not based on transactions but on the number of branches/locations it is installed.
The Indian Income Tax Department’s CPC (Core Processing Centre) is the best example of the Per-Transaction Payment Model.
In the case of new set-ups it is difficult to predict on the initial number of actual transactions, hence BMB has chosen to innovate, by proposing the Per-Usage Payment Model.
As on date, three technology companies — Infosys, US-based technology firm FIS Global and Polaris Financial Technology — are in the fray for the ambitious project, to be based on the hosting model.
According to the terms and conditions, the selected service provider will own the hardware and software of the entire bank and will be paid on a per-branch-per-month basis.
BMB – Leading the Way:
Hosting model: Mahila Bank to be the first Indian bank to go for this model for tech infra
Costs: Besides managing IT operations, tech partner to bear the costs for hardware and software
Payment: Tech partner to be paid on a per-branch-per-month basis
Asset transfer: After end of the contract tenure, all the assets would be transferred to the bank at a pre-determined price
Benefits: The model would help the bank avoid making upfront investment in technology; would also hasten the expansion process
More importantly, with the issuance of new banking licenses around the corner, this new innovative model will be watched by many in both the IT as well as financial industry.
A partial success, will lead to many innovations in the Indian Banking arena.
According to the conditions set by the finance ministry, data would initially be stored on the service provider’s servers, while all IT assets, hardware as well as software, would be transferred to the bank at a pre-determined price after a certain period.
As the operations are set to commence in November,2013, the winner would be known in another couple of weeks.
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