TCS to sign Rs 1 bn contract with SBI

MUMBAI: Unlisted Tata Consultancy Services (TCS), India's largest software

service company, has landed its second big contract in a month, according to an

Indian banking industry source.

At a press conference in Mumbai, TCS will announce it's signing a nearly Rs

1.0 billion ($20.4 million) deal with State Bank of India (SBI), the nation's

largest bank, to upgrade its information technology systems over two years.

An SBI source told Reuters that TCS would provide core banking solutions to

its 3,000 computerized branches. Of SBI's 9,000 branches across India, only a

third are now computerized and just 800 are linked.

TCS declined to comment.

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 and others over recent months are

fuelling keen interest when TCS will announce a long-awaited initial public

offering (IPO) of shares.

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. State Bank of India is the nation's

largest bank, alone accounting for a fifth of the banking industry in terms of

both deposits held and loans issued.

SBI has budgeted Rs 7.0 billion ($143 million) 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.

(Additional reporting by Anirban Nag in Bombay)