2. Reinventing with Outsourcing YES BANK Experience Balaji V Vice President, Business Services July 4, 2005

3. Contents Genesis of YES Bank Technology Sourcing - Our Drivers Strategic Importance / Risks & Benefits Evaluation Framework The Deal Mechanics Our Partner

4. Genesis of the Bank One of the 2 licences granted after a period of 9 years Desire to build a world class knowledge driven Indian bank catering to “Emerging India”  Space in the banking arena for a sector focused institution Create a platform for professional entrepreneurship  Empowerment to people enabling personal and professional growth  Creating and sharing value Establish highest standards of professional integrity, ethical standards, regulatory compliance, transparency and corporate governance Desire to set higher benchmarks in banking services Create shareholders wealth at large

5. Defining Sourcing Strategy Identification of Drivers for Outsourcing Core Competence Analysis Outsourcing Risk Analysis Scanning the Market Deal Type Assessment YES BANK CASE STUDY Early Successes Quick Adoption of Best Practices Rapid People & Infrastructure Deployment Better Pricing Strategic Total Outsourcing IT Investment Portfolio Strategic Alliances Technology Framework and Relationships Evaluation Framework Managed Services Capabilities Hardware & Equipments Strategic Fit Assessment Financial Decision Making Soft Factors

6. Outsourcing Drivers Comparison of Project Success rates by Project Class Source: IBM Institute for Business Value Analysis Reasons for Outsourcing Source: Outsourcing Institute

7. Strategic Importance Leverage Global Technology Expertise  Build Technology Differentiators Benchmarking Operational Efficiencies  Collaborate on joint initiatives for Business Process Services Intellectual Banking Expertise Exchange  Center of Excellence for Risk Management, Basel II, STP Implement World-Class Practices in IT Operations  Six Sigma, ITIL, CoBit

8. Risk Factors - Inhibitors Outsourcing has the Potential to transfer risk, management and compliance to third parties who may not be regulated and who may operate offshore Risk Spectrum StrategicReputation ComplianceOperational ExitCounterparty CountryContractual AccessConcentration & Systematic BASEL Committee on Banking Supervision

9. Evaluation Framework Managed Services Capabilities  Delivery and SLA Mechanisms Hardware & Equipments  Pricing, Technology and Delivery Lead times & India Presence Strategic Fit Assessment Financial Decision Making  Buy Vs. Lease Soft Factors (Relationship, Contractual, Cultural)

10. DRIVERS Focus on Core Competencies Faster “Go-to- market” Risk Containment Investment Optimization

11. Evaluation Methodology Request For Information Sent Response from The Big 3 Comparative Study Internal Competency & IP Retention Assessment Detailed Requirements (RFP) for Outsourcing Specified In-depth Comparison analysis (Quantitative) Overall Capabilities Assessment (Qualitative) Parity Checks and Interim Negotiation Market Assessment Initiation of Strategic Discussions Strategic Deal Framework Definition Invitation to Participate Responses Evaluation & Strategic Fit Assessment Scores SimilarFinal Presentation Evaluation by Core Team Gartner Evaluation Evaluation by Business Heads INTENT FOR CLOSURE 6 weeks 11 151820

12. Sample Evaluation Parameters

13. Our Technology Partner Utility to Transformational Changed Measures “Reactive” to “Proactive” Prevention World Class Business Process Infrastructure Innovative delivery methods & technology tools Scale of resources in wide range of technology platforms Range and Depth Of Competencies Our Partner

14. The Deal Mechanics “Best of Breed Consortia” Prime Partner – Leading INDIAN Technology Company  IBM, CISCO, HP, Bharti, Reliance Well Defined Managed Services Framework  Continuous Improvement Product Agnostic Proposal Competitive Pricing – Ability to ensure “checks” Obsolescence Safeguard Well-defined Strategic Relationship Roadmap  To leverage each other respective expertise

15. Contracting – Ensure Success Contract Development  Localization, Regulatory, Business Groups Review  Engagement of Specialists – Gartner, CB, E&Y Contract Essentials  Flexible, Strategic Objective Statement  Addresses Risk & Innovation, Captures Continuous Improvement  Living Agreement Contract Structure

16. Thank You !