New national payment system for interbank transactions to take effect in 10 months’ time

Oromia International Bank (OIB) became the newest entrant to the list of banks in the process of installing core banking solutions by selecting Infrasoft Tech International and its local partner as its vendor on July 9, 2010.

OIB floated a tender in January 2010 to 15 preselected international vendors and shortlisted five before selecting Infrasoft Tech’s OMNIEnterprise core banking software, in a process that took four months.

“When approaching the selection process, we looked not only into their technology systems but also at the cost of installation,” Worku Lemma, deputy CEO of OIB, told Fortune. “We were also on the lookout for any extra expenses we may be charged in the long run.”

Following the National Bank of Ethiopia’s (NBE) launch of a national payment system (NPS) on July 8, 2010, to be installed by Motran and Ernst & Young (E&Y), commercial banks now have only 10 months to start using core banking solutions before the  commencement of the NPS.

Commercial banks will need core banking solutions to be able to clear and settle all interbank payments, which will be done electronically instead of manually, once the NPS becomes operational in ten months time.

This makes OIB the newest addition to the many banks that have already selected vendors to install their core banking solution systems in a bid to meet the deadline.

Infrasoft Tech and its local partner of two years, Fairfax Technologies, are to start the installation process, the first of which is research, within 21 days of signing, according to the deal.

“The installation process might take up to a year,” said Yared Demissie, managing director of Fairfax Technologies. “We have Infrasoft Tech certified engineers who will enable us to provide local implementation and support services to all customers of the software technology in the long run.”

The partnership like model that is offered by Infrasoft Tech, in which they are to work on business benefits that the bank is expecting to derive from the technological investment in the long run, is what appealed to OIB, said Worku.

As part of the deal, OIB also receives other solutions like Internet banking, mobile banking, and Islamic banking, he said.

Infrasoft Tech has already installed core banking solution systems for Wegagen Bank and is bidding for that of Oromia Cooperative Bank and Bank of Abyssinia.

“Infrasoft Tech is happy to gain OIB’s confidence as a core banking partner,” said Hanuman Tripathi, group managing director of Infrasoft Tech International.

“We are committed to [sharing] the knowledge of global best practices that the company has acquired [through] working with over 200 banks in international markets which will make the bank a competitive one, not only locally but also globally,” he said. 

By EDEN SAHLE
FORTUNE STAFF WRITER