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TCS signs huge IT deal with SBI

Unlisted Tata Consultancy Services, Asia's largest software service company, said on Friday it had signed a deal with India's biggest bank to upgrade its information technology systems.

A joint statement, obtained by Reuters ahead of a news conference, did not reveal the value of the deal with State Bank of India , but a banking industry source said earlier it was worth nearly Rs 1 billion.

"The project is one of the largest of its kind in the world in terms of the number of branches, customers and transaction volume," the statement said.

TCS is part of India's $8.5-billion tea-to-telecoms Tata conglomerate, the country's second-largest industrial group behind Reliance. It has indicated it wants to make an IPO sometime this year.

With 19,000 professionals at 106 branches in 29 countries, TCS has over 800 global clients including of seven of the 10 biggest US companies. These include American Express, AIG, Boeing, Citibank, Dell Computers, General Electric, Hewlett Packard, Lucent Technologies and Nike.

SBI accounts for a fifth of the Indian banking industry in terms of both deposits held and loans issued. It has 51 foreign offices in 31 countries, and with its associate companies has a total of 13,000 branches, the statement said.

Only a third of SBI's 9,000 branches are now computerised and just 800 are linked.

The deal signed on Friday involves procurement, supply and installation of hardware and customisation of the core banking software at SBI's branches, besides training and support.

TCS will manage the entire project and systems integration, but as the prime vendor, it has teamed up with Financial Network Services, Australia and Hewlett Packard, India, for this project.

"Over the next two to three years, core banking will be rolled out to over 3,000 branches of SBI and its seven associate banks, bringing the benefits of modern technology to customers in over 250 cities and towns," Y Radhakrishnan, managing director of SBI, said in the statement.

SBI has budgeted Rs 7 billion to spend over three years upgrading its IT system -- computerising operations at more branches, inter-connecting them and extending its ATM network.

The move is prompted by intensifying competition with fast-growing, tech-savvy private sector banks like ICICI Bank Ltd and HDFC Bank Ltd.

MASSIVE DEALS

In April, TCS signed a contract estimated to be worth $100 million over two to three years from the $8 billion a year GE Medical Systems, a subsidiary of General Electric Co.

These announcements have fuelled interest about when TCS will announce a long-awaited initial public offering of shares.

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