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HSBC Outsourcing Designs in India

The banking institution's new facilities in the cities of Kolkata and Hyderabad will employ thousands

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

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

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 center 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 US$1 billion by the end of 2007. HSBC CIO Ken Harvey recently revealed that almost half (42 percent) of the bank's IT development work is now done in low-cost offshore centers.

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 labor arbitrage when compared with developed countries. However, with increasing cost of employment across all sectors, we will have to look into the labor arbitrage within the country."

Provided by ZDNet Asia—Where Technology Means Business

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