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HDFC Bank launches rural BPO

August 26, 2008 17:19 IST
Last Updated: August 26, 2008 17:58 IST

HDFC Bank [Get Quote] has set up the country's first ever commercial scale rural BPO at Tirupati in Andhra Pradesh employing youths from weaker sections in nearby villages.

A Rajan, country head, operations, HDFC Bank, said  the BPO, set up by the Bank's subsdiary, ADFC, commenced operations in July and started  supporting several outsourced processing activities of the bank.

It presently employs more than 500 staff with plans to ramp it up to over 1,500 by March 2009, making it one of the largest rural BPOs in the banking sector.

Giving the rationale behind setting up a rural BPO, he said, "the bank is pioneering an initiative which has the potential to revolutionise rural India by taking job opportunities closer to the rural doorsteps, through economically viable projects."

He said the bank will be able to achieve it without compromising on customer service levels and economic viability of the project.

Depending on the success of this initiative, there are plans to open similar rural BPOs in other states as well, he added.

Rajan also felt the idea holds huge potential and other banks, insurance companies, mutual funds also could consider financial outsourcing  through rural BPOs creating jobs in thousands in the hinterland .

The BPO is located at Tirupati which is a semi-urban area where the bank managed to get broadband connectivity from Bharat Sanchar Nigam Limited.

The bank opted for Tirupati since an actual village location cannot support infrastructural facility like power supply, broadband connectivity and maintenance support for the software and hardware used.

According to Rajan, the cost of setting up a rural BPO works out to be higher given that broadband connectivity

is required to support advanced imaging technology which is required to be used due to the remoteness of the BPO location.

However, he said this cost would be more than offset by superior productivity from the rural youngsters who get to work in a high-tech office environment without having to compromise on their family-based activities like agriculture, carpentry, dairy farming etc.

A major benefit of setting up a BPO in rural areas is the low level of attrition and  the resultant reduction in training expenses, he said.

These youngsters are on full-time employment on the rolls of ADFC with cost to company averaging Rs 4,500 per month, which is over four times their earnings per month.

Rajan said the feedback on the quality of work done at the BPO is encouraging with the staff striving to prove they can outperform their urban brethren. 

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