IndusInd Bank plans to acquire other banks

domain-B Mr K.R Maheshwari, managing director and chief executive officer of the bank said, "We are negotiating with some banks in the south. I will divulge the name at an appropriate time." This move is likely to bring down the promoters'' stake to 40 per cent from the present 56 per cent

In addition to completely automating its operations using IT, the bank is also seriously looking at retail banking as future thrust area. On retail banking Mr. Maheshwari said, "Retail clients give us access to cheap and relatively stable funds and this is one of the main reason for retail thrust. From 9 per cent in 1999 to 18 per cent in fiscal 2000, the retail segment will constitute 30 per cent of our total banking operations by the end of the current financial year. We expect this to rise further to 40 per cent in fiscal 2002 and 60 per cent in fiscal 2003." The bank currently has about 117,000 account holders which is likely to increase to about 180,000 by the end of the current fiscal.

The bank has major capital investment plans. Speaking to domain-B, Mr Maheshwari said, "We plan to invest about Rs 80 crore by March 2003, all of it through internal accruals. This will involve substantial investment in IT. We are also increasing our branch network from 31 to 50 by March 2001. Out of these at least 37 to 38 branches will have ATM machines. In addition we also propose to install about 60 offsite ATM machines in the next one and a half years. In order to provide value added services to our customers we plan to use ATM machines of other banks as well."

As a first step towards its technological upgradation, IndusInd Bank has signed an agreement with Chennai-based, Financial Software and Systems (P) Ltd., (FSS) for acquisition of its proprietary, BASE24-ATM switch, to provide solutions for ATM/POS switching, debit/credit card processing and management systems, Internet banking and e-commerce.

The BASE24 solution from FSS is focused at providing a 24x7, unified transaction processing and switching environment, which enables integration of front-end delivery channels like ATMs, POS, Internet banking, e-commerce payment gateway (B2C & B2B), smartcard payments, IVR and call center, utility bill payments and other delivery mechanisms with back-end banking host systems.

Mr. Maheshwari, also announced that, "during the next few months, IBL would be rolling out innovative web based transactions services, mobile banking facilities and e-broking platform among a host of other activities."

Another advantage of the new technology that the bank is seeking to install, is that the existing ATMs could be better monitored, controlled and down time totally avoided. The new switch would also enable the bank’s ATMs to talk to other networks like Master Card, Visa and SPNS.

"The bank sees IT as the key enabler towards cost-optimal, differentiated and highly customer friendly services across diverse delivery channels and plans to make an investment of about Rs 16 crore. " he added.

Mr. PV Jaishankar, president & chief executive officer, of the newly formed IndusInd Information Technology Ltd. (IITL), mentioned that, "the Company is backing the future IT activities of IndusInd Bank and will offer current-generation IT services, both within and outside the group."

The Bank is in talks with mobile service providers to introduce short messaging service facilities to its customers in the city of Mumbai and the state of Gujarat. Further, it is planning to offer WAP enabled services, which will facilitate presentation and delivery of information on mobile phones and other wireless terminals.

It is venturing into e-commerce and e-banking for facilitating business transactions through the net. Upgradation of net.bank product will enable the bank to offer payment and settlement capabilities, utility bill payments and other features with true ‘online to host’ features.

A fully integrated depository services product facilitating e-trading services by tying up with brokers to provide online services on a secure e-environment is also on the anvil.