Public sector lender, Indian Overseas Bank is aiming to open a banking software subsidiary keeping in focus the Asian and African markets, said a top official of the bank.

"Our core banking solution (CBS) was developed in-house. We find there is good scope in the market for our solution. However, we have to get permission from the RBI (Reserve Bank of India) to get into a non-banking activity," chairman and managing director M. Narendra said.

The bank arrived at this decision when it was approached by another bank regarding banking software.

"As we are not in the business of selling software, we could not sell our solution. However, we decided to take this idea to its logical end, and sought expression of interest," M.S. Raghavan, general manager (information technology) said.

As many as 16 software companies are interested in partnering with the bank in this regard, said Raghavan.

The present software division of the bank has 240 people of which 100 were hired last year.

"Our investment in hardware is just Rs.45 crore, the lowest amongst all other Indian banks," Raghavan added.

"Our main focus is overseas markets like Bangladesh, Africa and other countries," Raghavan said.