HSBC expands data processing and enters insurance broking
Usha Somayaji
21 July 2001
The pace of expansion at one of the oldest foreign banks operating in the country, the Hong Kong and Shanghai Banking Corporation (HSBC), may seem steady but slow. But its move is 'fast forward' when it comes to its 'new economy' businesses, notably electronic data processing, and insurance.
It has taken HSBC 150 long years to open 29 branches in the country -- the 29th was inaugurated on June 28. The bank, however, cites restrictive licensing policies by the Reserve Bank of India as the main reason for this slow growth.
"It's only a few years since foreign banks were allowed to expand in the country," points out Zarir Cama, chief executive officer, HSBC India. "And even then, we were bound by RBI licensing policies in terms of where and when to open new branches." The bank has applied for licences to open branches in Ludhiana, Jaipur, Noida and Coimbatore, but is not sure where the licenses would be given.
There has been no such constraint over its 'new economy' business, the electronic data processing activity under the HSBC group subsidiary, the Hyderabad-based HSBC Electronic Data Processing India. This company carries out data processing activity for the group. For the moment, it carries out data processing for its UK operations, which will be expanded to cover the data processing activities for its US, Canada and other operations.
The unit, which is housed in a 30,000 square feet premises in Hyderabad's Hi-tech City, will move to its own, larger, custom built building, doubling its operations and working in two shifts. The next phase will see three to four more centres in the country, most likely in Pune, Bombay and Chennai.
Additionally, the company is planning a call centre with an investment estimated at $15-20 million in this operation.
