HSBC ramps up Indian outsourcing presence

HSBC is expanding its offshore outsourcing operations in India with a new BPO facility in Kolkata (formerly known as Calcutta) and a software development centre in Hyderabad.

HSBC already has one wholly owned BPO subsidiary - HSBC Electronic Data Centre - in Kolkata, which has 2,000 employees working on back-office operations, and is now planning to set up another centre in the same city.

HSBC's general manager and country head for India, Naina Lal Kidwai, said the second BPO facility in Kolkata will employ another 2,000 staff, according to reports in India.

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Kolkata is trying to shake off the image of poverty associated with the city with a modern infrastructure, and is aiming to undercut other Indian offshore outsourcing destinations including Bangalore, Delhi, Hyderabad and Mumbai.

The bank is setting up a second offshore software development centre in Hyderabad in addition to its existing facility in Pune.

Last year HSBC said it plans to double the size of its offshore operations to 25,000 employees within three years to help reach a target of cutting costs by $1bn by the end of 2007. HSBC CIO Ken Harvey recently revealed that almost half (42 per cent) of the bank's IT development work is now done in low-cost offshore centres.

Kidwai said rising wages in some of the established offshore outsourcing cities in India had forced the bank to look at alternative locations such as Kolkata.

Speaking to the Indian media after a meeting with West Bengal government ministers she said: "India definitely gives us a labour arbitrage when compared with developed countries. However, with increasing cost of employment across all sectors, we will have to look into the labour arbitrage within the country."