Citibank rethinks BPO sale to Genpact

It was touted as the first deal of its kind in the Indian BPO industry but just three months after Citibank sold its BPO arm to Genpact for $630 million, the bank may eventually back away from the deal.

NDTV has learnt that Citibank is rethinking its decision to sell its BPO operations. The primary concern revolves around the impact on core banking operations such as customer service which are handled by the BPO arm.


The senior Citi officials are worried that a third party vendor handling such strategic functions could raise compliance and regulatory issues.

At the same time, cost cutting pressures in Citi's US business could mean more offshoring to the Indian BPO arm.

While no official concern has been raised, the re-think on the deal comes is the light of an increased focus on customer service from the Reserve Bank of India.

The RBI has increased its vigilance of customer service and has been conducting impromptu checks to ensure that customer service guidelines are being followed.

In addition, the RBI maintains that even if a banking function such as customer service is outsourced, the bank remains ultimately responsible and liable for the quality of the service.
While refusing to comment specifically on the future of Citi's deal with Genpact senior officials do accept the pitfalls of outsourcing core functions.

The informal talks around the future of Citi's Indian BPO operations are continuing. Sources say that there are more than enough interested buyers out there but Citi is simply not sure if it wants to sell anymore. Citibank and Genpact officials declined any official comment on the deal but for now it seems unlikely that this high profile will finally be inked.

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source (NDTV PROFIT)