International banks are pulling capacity out of India to relieve pressure on staff suffering from the country’s intense second coronavirus wave, as regulators consult with lenders about the potential impact of the crisis.
UK lenders Barclays, NatWest and Standard Chartered, which between them directly employ more than 50,000 staff in India, have all been putting non-essential work on hold or diverting business to employees in other countries and stepping up support for India-based staff in recent days.
Jes Staley, Barclays chief executive, said on Friday: “We are shifting some capacity to the UK, India is a very tough place right now.” He said the bank has taken steps such as asking staff in the UK, including those in branches, to take more calls and work longer hours.
“India is critically important for us . . . I’m sympathetic to what is going on,” he added.
India is the world’s largest back-office and outsourcing hub, with some 4m employees doing everything from answering customer-service calls to providing research for investment banks and hedge funds.
The country reported a world record 386,000 Covid-19 infections on Friday, along with 3,500 reported deaths. Experts believe those numbers are a significant undercount.
Many top banks and companies have their own in-house operations in the country, while others outsource services to Indian IT giants like Tata Consultancy Services and Infosys. Banking and financial services firms are some of the biggest users of such services, and account for around 40 per cent of TCS’ revenue.
UK bankers have also been discussing the situation with regulators at the Bank of England, according to several senior industry figures and people close to the regulator. One person close to the BoE said the regulator was “engaging closely” with firms but had so far not identified any significant problems.
“It will be something on the regulators’ agenda just from an operational perspective,” said one senior banker who had been in touch with the central bank.
Several executives said they had reassured the central bank that they had already built the infrastructure to keep operating remotely during India’s first lockdown last year. However, the scale of the latest crisis has increased the burden on staff, with large numbers falling sick or having family members affected.
Bill Winters, chief executive of Standard Chartered, told analysts on Thursday: “We have material case counts amongst our population, both in our service centre and in the bank itself.”
The London-headquartered bank has both back-office operations and a retail banking business in India, and Winters said staff in its branches had been particularly badly affected.
“Banks are considered essential services, so we’ve had a disproportionate share of the cases in the branch staff, very unfortunately,” he added.
Much of the spread is in and around large cities like Bangalore, Mumbai and Delhi, where many of India’s back-offices and call centres are located. This has required businesses to mobilise vast resources to keep their operations running.
With India’s health system under severe strain, TCS for example has created a task force to manage Covid testing, treatment and vaccination services for its nearly half a million employees. It has set up treatment facilities in 11 cities and is working with hospitals in several others.
“You talk to any company and they’ll tell you that [infections among employees] are far more this time,” said a senior executive at a large outsourcer. “The virus is spreading and you have to ensure that you stay ahead and are on top of it.”