Interview: A Rajan, Group Head-Operations, HDFC Bank, IndiaInterview: A Rajan, Group Head-Operations, HDFC Bank, India

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A Rajan is the Group Head – Operations of HDFC Bank, India. In his position, Rajan leads a team of senior Operations Heads who provide specialized operational support to various business divisions of the Bank like Corporate Banking, Retail Banking, Treasury, DP & Custodial Business, Credit Card Division, Capital Markets, Commodity Finance, Financial Institutions Group, etc.  In an interview with Ritu Srivastava, i4d Team member, he shares his views on HDFC Bank’s initiatives in establishing rural BPOs and future of rural BPOs in India and other developing countries


What prompted HDFC Bank’s foray into the Rural BPO sector? Where was the first rural BPO launched by HDFC Bank?

HDFC Bank has been working on hi-tech processing from the time of its inception, with large central processing units at Mumbai and Chennai. During one of my visits to some interior parts of India, I came across a group of youngsters who had put together a small BPO which employed a handful of rural youths working in a dedicated manner. That actually fired a thought in me as to how some of our Bank’s processes can be diverted to support such initiatives and contribute to rural employment opportunities. Later on, I also had a meeting at Hyderabad with an organisation called Employment Generation and Marketing Mission (EGMM), a division of the Department of Rural Development, Government of Andhra Pradesh, having similar objectives.  EGMM works towards identifying deserving rural based youngsters from the lowermost economic strata in the society and preparing them with adequate training to take up employment in various organisations.

With the support of EGMM, we started a pilot BPO project at a place called Nellore in Andhra Pradesh, where daughters and sons of farmers, labourers, carpenters, weavers, etc. from nearby villages were employed. We provided them with training facilities to work on computers to capture customer data from scanned images of application forms and bring back the data files to our central servers at Mumbai to open the customer accounts.  Since scanned images were being sent to Nellore over broadband connectivity and brought back to the central server in the form of encrypted data files, we could manage the entire activity without any loss of turnaround time for the customers of the bank and without compromising on data safety.


Is it a strategy to bring about a more cost-effective system of servicing your customers?

Honestly, I did not think about the cost-effectiveness at the time of starting this project since it was started more as a Corporate Social Responsibility (CSR) activity to do something to provide employment opportunities for the rural youth.

The cost aspect was considered to the extent that the Bank should not be spending more than what it was incurring for similar activities in the metro cities. This was important, since it is pointless to start an initiative unless it is economically viable and self sustaining in the long run.  Since the BPO is located at a remote location to provide job opportunities closer to the rural areas, the bank incurs a high cost on leasing appropriate bandwidth connectivity.  However, this connectivity cost is likely to be offset by the fact that infrastructural cost like rentals and wage bills are much lower there, compared to that of metro cities like Mumbai, Chennai etc. Moreover, at such remote locations, attrition levels are much lower, since these youngsters also manage to continue to support their family business after working for 7 to 8 hours in the BPO, providing a steady income to their family.  This benefit is not available to them if they work in a far away city.


Does HDFC Bank provide training to the prospective employees of its BPO?

Yes, we do. We provide them with very extensive training in handling a computer keyboard, using software applications and in understanding basic banking products.  It takes them approximately six months to become really productive in their work areas.


Currently the BPO is located in Nellore and Tirupati. Do you have any plans of expanding your Rural BPO operation to other parts of India?

Nellore was the pilot launch of rural BPO to test the concept.  However, the BPO at Tirupati is a full fledged one, providing for nearly 600 seats with facilities for recruitment, training, among other facilities. The reason for locating the BPO at Nellore and Tirupati was mainly due the excellent support and co-operation that we got from EGMM, Andhra Pradesh in identifying and preparing deserving rural youths from the nearby villages for our selection process of tests and interviews. I will be happy to replicate this model in other parts of India if I can get similar support from those state governments. More significantly, while it may be comparatively easier to set up a rural BPO, the real challenge is in sustaining such initiatives with a steady flow of viable processing business. While banks can support it to a certain extent, I am hoping that this model will inspire other organisations in the country to build similar rural BPOs across the country.


Could you please define what kind of business model is HDFC Bank using? Is it tough to migrate work from urban BPOs to rural BPOs?

HDFC Bank is using a sustainable and economically viable model

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