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HSBC into insurance broking — Golden handshake overshoots target

Our Bureau


Mr Niall SK Booker, Chief Executive Officer, HSBC India, with Mr Arup Mazumdar, CEO, HSBC Insurance Brokers (India), at a press conference held in Mumbai. -- Paul Noronha

Mumbai , Aug. 18

MORE than 500 employees of Hong Kong and Shanghai Banking Corporation Ltd (HSBC) — both clerical and non-clerical staff have accepted the voluntary retirement scheme (VRS), which closed on July 31.

"The scheme open to only non-managerial staff was accepted by 514 employees, overshooting our target of 350,'' said Mr Niall S.K. Booker, Chief Executive Officer, HSBC, at the sidelines of a press conference held here today to announce the group's entry into the insurance broking business.

The VRS programme, reportedly an attempt by the bank to reduce the average age profile, saw people between 38-45 years accepting it. The bank's staff strength now rests at 2,800.

"There is a restructuring programme on to alter the labour structure within the bank, a drive is on to develop a set of skills of employees and also to change basic terms and conditions of employment. The former effort is under way to drive sales and the latter to lower the cost base, which is increasingly necessary as the retail business of the bank increases," explained Mr Booker.

The structure will be altered to have more people handling selling and servicing rather than on the operational front of business, he added. He, however, refused to elaborate on how terms and conditions of employment would be altered.

Mr Booker declined to divulge the payout from the bank towards the VRS. This is HSBC's second VRS in the country, with the first one having been in 1998, which saw 120 people take the golden handshake.

Employees were offered 10-year pay based on their gross salary thorough the scheme.

The bank announced that it had received a licence from the Insurance Regulatory and Development Authority to operate as a composite insurance broking company.

HSBC Insurance Brokers (India) Pvt Ltd, started with the minimum requisite capital of Rs 2.5 crore, will have the following shareholding pattern HSBC — 26 per cent, customers and associates — 74 per cent.

"These associates are from different streams of business and will help bring in revenue through referrals,'' said Mr Arup Mazumdar, CEO, HSBC Insurance Brokers (India) Pvt Ltd. The new company hopes to focus on financial institutions and overlooked areas such as protection against business disruption and liability covers.

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