Bank of America Corp, which has outsourced many jobs to emerging market economies, now plans to set up a wholly owned subsidiary in India for its back-office operations, said a Forbes report on Wednesday.
The bank also aims to employ about 1,000 persons at the new unit by mid-2005, said Forbes. The new unit, to be called Continuum Solutions Pvt Ltd, will be set up in the second quarter of 2004 in Hyderabad.
BankAm's business process outsourcing push could further fan the fire that outsourcing of US jobs has created in America, especially at a time when the US elections are only a few months away. John Kerry, the Democratic frontrunner in the US presidential campaign, has been quoted as having called companies that outsource jobs to low cost nations like India 'traitors.'
The BankAm unit, says Forbes, will hire 500 people by 2004-end and ramp up the recruitment to 1,000 by mid-2005. The bank said that the Hyderabad unit will 'provide back-office support for processes within the bank's main business segments, including consumer, commercial and corporate, and enable the bank to cut costs,' Forbes reported.
"BoA, which has faced protests over decisions to outsource jobs overseas, is already among the biggest clients of leading Indian software exporters such as Tata Consultancy Services and Infosys Technologies Ltd, India's largest and second-largest exporters," Forbes said,
"The bank has said the move to set up the Indian subsidiary would mean some job losses from its global operations, but BoA officials said in October the company had not decided which functions would be moved to India," the report said.
According to US analysts, almost 66 per cent American banks outsource work to low-wage nations like India, China and Russia.