Having lost some income from US banks, due to their IT cost cutting measures, India’s top software companies, TCS and Infosys are about to break the ice by formulating business plans with Chinese banks.

Leading Chinese banks such as China Construction Bank (CCB) and Agricultural bank of China along with several others in the country plan to spend around $7.6 billion (Rs 38, 486 crore) on IT next year, which would mean a lucrative market for Indian IT firm.

TCS looks all set to banish all its worries and capitalize over Chinese bank demands. TCS Asia business head, Girija Pande, said, “We are looking at opportunities with the big four Chinese banks, the core banking software deals at tier-I banks could be around $100 million each.”

The company last year had won a $100million contract from the Bank of China, and claims to have a banking software product called BANCS, which competes with Infosys’ Finacle and Oracle Financial Services’ Flexcube.

Infosys also has been successful in winning contract for China Bank and ABN Amro’s operations in Greater China. As reported in Economic Times, a core banking software based on modern platforms will help Chinese banks centralise their retail and wholesale banking operations, and also enable them to cope with increased lending activities as required by their government.

Compared with its US counterparts, Chinese banks have not yet made significant investments. Only 10 per cent of the Chinese banks offer online banking, with only one ATM machine in China for every 10,400 citizens, where as US has one ATM for every 735 citizens.

Pande said, “Banks in China are now looking for standard software packages, apart from the four major banks in China, there are around 15 tier two banks such as China Merchant Bank looking to become tech savvy.” China Banking Regulatory Commission (CBRC) recently suggested that bank IT in 2009 should emphasize risk management, especially internal risk control.

However, locking the lucrative deal may not be easy for Indian Software majors as they will have to compete with Chinese tech firms such as Longtop, Vance Info and Yucheng. X