ROYAL Bank of Scotland (RBS) plans to expand its financial backoffice operations in India with a new facility in Chennai with potential to develop into a 4,000-seater hub over time.
The banking major, which operates as ABN Amro in India at present, has leased nearly 4.6 lakh sq feet of office space, considered by realty players as a large deal particularly in hard times such as these, in Chennai’s Ambattur suburb.
Sources said the new leased facility would be a fresh backoffice offshoring centre of RBS globally and not necessarily a consolidation of ABN Amro’s existing operations under one roof in the city. RBS, which acquired ABN Amro, is talking about possible cost savings of over £2.5-billion in the next few years.
“India could be a net beneficiary in the context of technology development and backoffice offshoring by RBS even though it is too premature to detail the same,” said a source. When contacted, an RBS spokesperson said: “...As a result of acquisition, we now employ 8,000 people in India, serving our operations globally, and we employ more than 70,000 people outside the UK. In the last year, we have been progressing with work to integrate the two businesses and develop all our centres in the UK, India and across the globe.”
At Rs 26 per sq feet per month, the deal is literally in the sub-$1 rental regime, that is witnessing a traction from companies looking at tightening rental costs. At about 100 sq feet of space per person, the capacity of the facility would be over 4,000, a source said. Realty sources said RBS will occupy the Ambattur facility in a phased manner.
RBS has already consolidated its technology development arm with ABN Amro’s back-office operations with an overall employee count of roughly 7000. Overall, RBS staff strength in India, along with ABN Amro, is pegged at around 10,000.
The banking giant, through ABN Amro India, signed up the lease agreement with Harish Fabiani-led India Land at its 1.7 million sqft IT park. India Land has attracted investments from Americorp Capital. India Land has ongoing IT SEZ projects in Chennai, Coimbatore and Pune.
ABN Amro has a significant captive BPO presence in Chennai. At present, ABN Amro backoffice operates out of two facilities in Chennai’s business districts of Mount Road and Guindy. Realty sources said the new lease is for expansion of its overall captive BPO capacity.
Ambattur, traditionally an industrial belt, is emerging as a destination for IT/ITES activities. Located 19 km from Chennai airport, it enjoys good connectivity.