BANGALORE, INDIA: IT major IBM, today announced that it has signed a 10-year information technology (IT) outsourcing agreement with Kurmanchal Nagar Sahakari Bank Ltd, urban co-operative banks in the state of Uttarakhand in India.

As part of the agreement, IBM would remotely host and manage the IT infrastructure, disaster recovery site and provide entire networking infrastructure for the bank.

This will help the bank focus on its aggressive expansion plans while reducing its capital expenditure on IT by as much as 60 per cent, said a press release.

Signed in 1Q 2009, this agreement is first-of-a-kind for IBM in Uttarakhand and follows its success with other co-operative banks in different parts of the country.

IBM is aggressively increasing its focus on the small and medium businesses in India including those based in smaller cities and hill stations like Nainital, where the bank is headquartered, the release added.

"Customer-friendly approach, product innovation and rapid technology adoption have been some of the core strengths of the bank. We are delighted with our partnership with IBM, the world's leading IT services company, " said Manoj Sah, CEO, Kurmanchal Bank.

He added that they believe their technology expertise and focus on delivering cost-efficient solutions would help them achieve their growth strategy and higher levels of customer satisfaction.

 The bank is now looking at rolling out core-banking solution along with offerings like Internet banking, mobile banking and ATM facilities to its customers.

The end-to-end managed services provided by IBM would greatly reduce the burden of upfront capital expenditure for the bank as the agreement allows it to spend in an operational expenditure model over a 10-year period.

Nipun Mehrotra, vice president and general manager, Global Technology Services, IBM India/South Asia remarked, "With businesses across the country sharpening their focus on cost-efficiency in these challenging times, IBM has once again proved its partnership value for small and mid-sized customers."

He added that they are excited about their relationship with Kurmanchal Bank to offer managed services that would help them reduce their upfront IT expenditure.

Nipun added, "The fact that the bank decided to enter into a 10-year long agreement further reiterates the trust clients—big or small—put in IBM's capabilities."

Through this agreement, IBM would host and manage Kurmanchal Bank's entire IT infrastructure from its own data center in Bangalore while ensuring performance checks as well as providing backup and replication services to the bank's Disaster Recovery site in Nainital, the release added.