Public sector lender Indian Overseas Bank will launch its proposed IT subsidiary before the end of September.

"We have already moved Reserve Bank for launching an IT subsidiary, and it has asked us to make a proper business proposal. Within the next fortnight, we will finalise a consultant for this," Indian Overseas General Manager for IT MS Raghavan told PTI here today.

Citing client confidentiality, he refused to name the consultant, but said the Chennai-based bank had shortlisted two of them.

Without naming any companies, Ragahvan also said the bank had also shortlisted 5-6 IT companies for selecting its joint venture partner.

When asked about the reason for foraying into a completely new business area, he said, "IOB has tremendous experience in the banking technology as we are only bank in the country that has developed its own software platform called IOB Crown."

On the trigger for the IT subsidiary plan, he said, "recently, a North-based public sector bank had approached us with a licensing proposal for the software. But we could not offer the service as we did not have the necessary regulatory permission to do so.

"So we moved RBI with a formal proposal, which it has agreed in principle, provided we hive off this into a separate entity," Raghavan said.

While Raghavan refused to name the bank that had approached him, it is learnt that the bank in question is the recently listed Punjab & Sindh Bank.

He further pointed out the IT venture will be a big revenue earner for the bank as the licensing fees that banks pay today to software vendors is too high.

On whether IOB has patented this software IOB Crown or has a trade mark rights over it, he said the bank was now taking this step.