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i-flex fails to pacify Saraswat Bank

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CIOL Bureau
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IRIS

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i-flex Solution issued a clarification in response to the claims made by

Saraswat Bank in the media recently about the software firm’s failure to

deliver banking software modules on time.

However, the i-flex’s vague clarifications have failed to pacify the

enraged Saraswat Bank management.

i-flex has mentioned in its notification/advertisement that ‘..all the

modules, except treasury securities module, ATM interface module and Flexcube

retail module, were accepted by Saraswat Co-operative Bank in February 2002.’

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However, Digambar Shirodkar, managing director of Saraswat Bank, said i-flex

was supposed to deliver the complete package by January 2000, adding that the

user acceptance test (UAT), which had begun in October 2000 is still underway.

Besides, the modules that are the bone of contention - treasury securities, ATM

interface and retail - are the most important ones for any bank to provide

quality services to the customers.

i-flex maintains that the delay in implementation of the project was due to

change in the bank’s management during the course of the project. To which

Shirodkar retorted, ‘How can change in management affect software

implementation.`

Speaking to Myiris.com, Shirodkar said, ‘We purchased the i-flex package in

May 1999 and so far we have spent Rs 32 crore on the software package, hardware

and networking. We have 30 executives working on the package and i-flex has

deployed only three software engineers on the project. Ninety per cent of the

package was amended to suit the requirements of the bank. But it has not

generated the required results,’ he added.

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On the UAT issue, Saraswat Bank stated that the i-flex stand that the bank

has signed UAT is misleading and incorrect. The UAT was signed conditionally,

subject to i-flex delivering many mission critical and statute compliant

requirements in their software and therefore full payment has not been made,

said the bank.

The Saraswat Bank again released an advertisement in the interest of

investing public in reply to i-flex solutions public notice/advertisement. The

bank has struck at the right time. i-flex Solutions is out with its maiden IPO

which opened on June 5, 2002 and will close on June 11, 2002.

The bank has stated in the notice that it has suffered huge losses both in

terms of direct cost in investments in hardware, software, systems software,

RDBMS and manpower as well as opportunity costs to the tune of over Rs 200 crore

and if it files a suit against i-flex it will be in excess of Rs 250 crore.

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The bank has appointed Yusuf Lanewalla as a consultant to advise the company

on the package. In a months time, the consultant will advise the bank on whether

they should continue using the package or the cancel the agreement and sue

i-flex.

Detail clarification given by i flex

i-flex‘s clarification follows: Saraswat Co-operative Bank Ltd entered into

a contract with i-flex to license Flexcube software. As per the contract, all

the modules, except treasury securities module, ATM interface module and

Flexcube retail module, were duly accepted by Saraswat Bank in writing in

February 2002, after a user acceptance test (UAT).

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The UAT for treasury securities module is being conducted at Saraswat Bank

and ATM interface module and Flexcube retail module are scheduled to be

implemented at a later date.

The accepted software is operating live after completion of the UAT. Saraswat

Bank has also made payments for the invoices due and raised by —flex for the

software implemented so far.

Source: myiris.com

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