Source: economictimes.indiatimes.com

UK-based Barclays Bank plans to set up a captive unit in India. The bank’s 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 Noida-based 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 UK-based bank had acquired a 50% stake in Intelenet in 2004 for about £19 million. The rest 50% was acquired by HDFC. But both HDFC and Barclays Bank sold their stake in the BPO to Blackstone for a reported $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.

Source: www.hindu.com

With the rupee appreciation and the slowdown in the U.S. economy, the Indian IT industry will have to evolve. Innovation, new delivery model and building business beyond borders will help the industry to survive and become a global leader.

Even as 2007 is readying to go into the pages of history, the year has seen some key events that have had an impact on the business community as a whole within and outside the country. Consider these:

An escalating rupee has triggered the U.S. dollar to drop from Rs. 44-45 levels to Rs. 39.

Though stock markets have had their ups and downs, 2007 has remained predominantly a bull year for them. The Sensex has moved up from 13000 to breach the 20000-mark to hover around its present level.

The year is also a witness to some mega deals such as Arecelor-Mittal, Tata-Corus and Vodafone-Hutch, to name a few.

The U.S. sub-prime mortgage crisis appears to have impacted most global banks and affected stock prices all over. Indian markets, however, have had no or very low impact.

With the information technology (IT) industry growing at a galloping rate in the past decade, IT stocks have been the darling of markets.

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