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UK based Barclays Bank plans to set up a captive unit in India. The banks third party BPO partner Intelenet is setting up a 1,000 people BPO centre for the bank in Noida. Barclays, however, will still continue outsourcing to Intelenet, which currently does work for Barclays processes from its Mumbai centre, according to industry sources. The Noidabased BPO unit is being built on a Build Operate Transfer BOT basis. The BPO unit will be transferred to Barclays in a few months time, though the timeline is not yet clear.
The UKbased bank had acquired a 50 percent stake in Intelenet in 2004 for about GBP19 million. The rest 50 percent was acquired by HDFC. But both HDFC and Barclays Bank sold their stake in the BPO to Blackstone for a reported USD 200 million Rs 800 crore.
The captive unit will be doing all regular financial back office work like transaction processing, account handling, credit card queries and customer service. In effect, Barclays will be following a hybrid third party plus captive outsourcing model like Dell. But incremental work to Intelenet from Barclays will slow down.
According to some offshoring experts, more and more core banking applications will move towards captive in future. Core banking processes like wire transfer and reconciliation are critical processes.
More and more banks are going the captive way for core banking processes because of very strict statutory guidelines in the US and UK. So much so that a PC working on a core banking application like wire transfer is never connected with the internet, says Avinash Vashishtha, CEO Tholons, an offshore investments advisory services provider.
But in some cases, captive units of banks have been put on the block. For example, recently Citi BPO put its captive BPO assets on the block. The recent credit crunch fuelled by the sub prime mortgage crises will lead more and more banks to outsource to India in the medium term.
And more and more will start with the captive unit, as it offers greater control and lower risk. Morgan Stanley, Goldman Sachs and other investment banks have been operating in the captive way in India since many years.
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