India’s decision to impose the world’s biggest virus shutdown has exposed a weak spot for the largest securities firms, which grappled with a sudden halt of their operations there.
Some global banks are scrutinizing their presence in Asia’s third-largest economy after the lockdown in March effectively closed call centers and other units overnight. European regulators have also assessed the impact of India’s lockdown on the banking industry this week, showing the challenges of providing the infrastructure such as laptops required to work remotely.
The push to outsource support functions such as call centers “exposed these banks to operational risks,” according to a
While regional governments including Karnataka, whose capital is Bengaluru, and Mumbai’s state of Maharashtra were quick to grant special exemptions so that some employees could go to offices, those policies were not across the board, and global finance firms struggled to put contingency plans in place.
“Our businesses within India remain operational while complying with all relevant government mandates and policies,” a JPMorgan spokesman in London said.
Some banks transferred work usually done in Mumbai to other countries, the people said. Barclays struggled to answer calls from customers seeking mortgage relief, according to the people. The bank’s Indian offices employ about 18,500 people, or 22% of its workforce, making the country its largest international base.
Some firms are considering moving some Indian roles back home or to regions near their main markets, such as Eastern Europe and Latin America, to address the operational risks, the people said.
Spokespeople for Barclays and Nomura declined to comment.
Banks’ business continuity plans “were largely able to address these challenges,” the EBA said, although some firms initially struggled to provide work-from-home equipment, such as laptops. “Some banks also faced the challenge of swiftly providing the infrastructure required to enable large numbers of staff to work remotely,” it said.
The global pandemic could reverse some of the wave of outsourcing that moved back- and middle-office jobs to India as banks took advantage of cheaper local wages. The Indian government announced a nationwide lockdown on March 24, prompting hundreds of thousands of people to
With some of the curbs now
Bank employees in other countries are preparing to return to their desks too, as governments ease social distancing restrictions.
(Updates with bank staff returning to work in other markets in last paragraph)
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Marion Dakers, Keith Campbell
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