IBM announced that it has signed a ten-year information technology (IT) outsourcing agreement with Kurmanchal Nagar Sahakari Bank, one of the leading urban co-operative banks in the state of Uttarakhand in India. As part of the agreement, IBM will remotely host and manage the IT infrastructure, manage the 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%.

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.

Established 25 years ago, Kurmanchal Bank plans to expand its banking network from 17 existing branches to nearly 35 over next two years. As part of its expansion strategy it also acquired another co-operative bank last year. 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 will 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. Through this agreement, IBM will 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.