Bank of India will spend Rs.2000 crore for IT upgradation

Bank of India has decided to spend Rs 2,000 crore on IT upgradation in FY26. Bank of India will upgrade its existing tech stack, enhance cyber security, and roll out digital initiatives related to products and operations.

This amounts to nearly 12% of Bank of India’s total operating expenditure but only 2.5% of the total income for FY25. The bank’s operating expenditure jumped 13% YoY with cost-to-income ratio falling slightly to around 51%.

“This year, we have put a budget of around ₹2,000 crore on the IT side, so that we are able to transform the bank into a fully technology and digital-driven bank. For FY25 also the budget was ₹2,000 crore, against which we spent 85%,” : Bank’s MD Rajneesh Karnatak.

Banks in India have realised that they need to upgrade their IT infrastructure. Recently, the SBI Chairman said that SBI will invest heavily in IT upgradation and announced that it will hire Specialist IT officers. While Indian banks have enhanced their IT budgets in recent years, they remain lower compared to their global peers.

A report by Boston Consulting Group in August 2024 had said that global banks typically invest 7-9% of their revenue on IT systems, while Indian banks allocate only up to 5%.

Public sector banks lag behind private banks when it comes to technological adoption. Though Bank of India MD refuted this and said that earlier there was difference in technology in PSU and Private Bank but now PSU Banks have adopted latest technology and now PSU Banks are not behind Private Banks.

Bank of India is also making use of technology and automation. Bank of India has automated 16 processes, which helped the bank save nearly 12,000 manhours. Bank of India is trying to automate daily routine things like other companies with the help of AI. The bank onboarded 5,200,000 customers on its mobile banking application in the previous fiscal, taking the total to 9 million.