KNOWLEDGE PROCESS OUTSOURCING AND ITS IMPACT

The Knowledge Process Outsourcing is a booming industry these days with a tremendous potential for future. It is different from BPO and is a knowledge based industry. Youngsters and experienced people from various fields with good educational qualifications to back them are taking up KPO jobs. It is an outsourcing business where high-end knowledge work is outsourced and handled by employees at the KPO center. The work could be related to any field such as finance, legal issues, intellectual property, analytics, market research and data management. It includes research work too. A KPO job requires deep knowledge in that area of work and high levels of confidentiality are maintained here. The new KPO outsourcing destination in India has now established as the most preferred Knowledge Process Outsourcing destination for the companies around the world. The KPO has advantages of top Indian talent in the fields that require special skills, expertise and knowledge perfections. To processes the demand of advanced knowledge, analytical interpretation and technical skills. It is one of the fastest growing business opportunities for specialized players in the market. Today, KPO as a whole generates $3.05 billion revenue annually and directly employs around 2,50,000 people in India. The worldwide KPO market is expected to grow to $16.7 billion in revenues by 2010-2011. From this, India would account for $12 billion.
Fields of work that the KPO industry includes are intellectual property, patent research, content development, R & D in pharmaceuticals and biotechnology, market research, equity research, data research, database creation, analytical services, financial modeling, design and development in automotive and aerospace industries, animation and simulation, medical content and services, remote education, publishing and legal support. CAs, MBAs, PhDs, engineers, doctors, lawyers and other specialists are expected to be much in demand.
KPO services as stayed here and Indians can now benefit much more than any time before. Large number of talents and supportive government policies together makes India the most suitable environment for KPO. Several global players are already investing in India. As with the BPO sector, India is cost-effective and provides a vast intellectual talent. Plus expertise in areas such as research and analysis. India’s Knowledge Process Outsourcing (KPO) business could touch $10 billion by 2012. Currently, the KPO market size is estimated to be around $5.5 billion and the sector is growing by about 15-17 per cent, dominated by professionals belonging to fields such as management, medical and engineering, the chamber said. KPO industry also includes company’s own divisions for Business Intelligence. These are generally off-shored or near-shored or in-house. These do almost the same thing as the outsourcing companies do and generally have teams like: Analysis, Business Consulting, Modeling and Scoring, Data Management and Reporting. Small and Medium Enterprises are likely to be the major growth drivers for the KPO sector, It is estimated that by 2010, in India, nearly 2,50,000 people would be employed in the KPO industry. With a huge population of educated people in India, it has become the preferred KPO destination of the world. With this wealth of talent, India is well-equipped to effectively handle high-end knowledge-based work in any field. The sector does not cater to any one field but requires specialized knowledge in various verticals. Unlike BPO, where only a good grasp on English language is required, in a KPO job, one has to be skilled and knowledgeable enough in the particular vertical that one is working for. The biggest advantage for outsourcing knowledge-based work and research to India is the cost advantage. International companies are increasingly finding it more cost effective to offshore KPO jobs to India here they can get quality work gets done at very reasonable rates as compared to their own country. Even in clinical and research trials, India enjoys a cost advantage. Thus, it is gaining steam here in India and it will soon edge out the BPO sector. For employees, it is a very lucrative career option .Even experienced and retired professionals from various industries can find high paying jobs in the KPO industry. It purely depends on the skill of the person and the knowledge of the industry that he possesses. Also, a KPO job offers its employees a chance to hone skills in a specialized field. It offers good pay packets to its employees. A professional with about two years of experience can look forward to an annual pay packet of around Rs 6 lakh (Rs 600,000) to Rs 8 lakh (Rs 800,000) whereas, an experienced professional would get anywhere between Rs 15 lakh (Rs 1.5 million) and Rs 20 lakh (Rs 2 million).Although knowledge-based back end work is required in many fields . All these fields require a lot of knowledge based work which is being outsourced to India in KPOs. Many foreign firms have set up their offices in India to carry out research and development work. They hire experienced and talented professionals here and get the required knowledge based work done at cheaper rates. Also, many Indian firms offer KPO services in various fields. The work is outsourced to them and is processed by the employees at these firms. The industry is fast picking up in India but there are a few challenges also that this industry faces. KPO is claimed to efficiently increase productivity and increase cost savings in the area of market research. The employees are snared away with the promise of higher pay packets and perks. Also, there is a perception that it is an unstable career so people are initially reluctant to join it. Most people are still unaware of the potential of this industry and the bright future prospects that it offers. Once it gains popularity and more and more people find out the benefits of working in a KPO, there will be a surge in this industry.
The KPO industry is growing at a fast pace and the high talent base of chartered accountants, doctors, MBAs, lawyers and research analysts in India is certainly going to capture a big pie of the global KPO business. The recent survey over Indian KPO industry shows that KPO professionals are earning twice as much as they were earning 4 years ago, there is an increased customer base and the presence of clients in other countries as well. This is an indication of huge growth potential for Indian sector. . If India becomes a KPO hub in line with BPO then India is going to be clear leader in overall ITes. India is well equipped to meet this emerging sector's challenges and all set to be the global KPO hub. Overall the future of KPO industry looks good.

Banking Industry in India

BANKING INDUSTRY OF INDIA

The Indian banking sector has been an integral part of the overall economy growing with and supporting the growth of other sectors. The Reserve Bank of India (RBI) is the topmost body monitoring the Banking Industry. In year 1960s, the Indian banking industry had become an important tool to facilitate the development of the Indian economy. The banking industry in India is sufficiently capitalized and regulated. The economic and financial conditions here are better than in any other country. Liquidity, credit, and market studies have proven Indian banks to be resilient. They have negotiated the downturn in the global economy well. Any short comings or discrepancies are dealt with by the RBI.

Banking history tells itself by their growth and its increases demand. Banking in India originated in the last decades of the 18th century. The first banks were The General Bank of India, which started in 1786, and the Bank of Hindustan, both of which are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the British East India Company. For many years the Presidency banks acted as quasi-central banks, as did their successors. The three banks merged in 1925 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India. The first fully Indian owned bank was the Allahabad Bank, established in 1865. By the 1960s, the Indian banking industry has become an important tool to facilitate the development of the Indian economy. At the same time, it has emerged as a large employer, and a debate has ensued about the possibility to nationalize the banking industry. In the early 1990s, the Narsimha Rao government embarked on a policy of liberalization, licensing a small number of private banks. These came to be known as New Generation tech-savvy banks, and included Global Trust Bank (the first of such new generation banks to be set up), which later amalgamated with Oriental Bank of Commerce, UTI Bank(now re-named as Axis Bank), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy of India, revitalized the banking sector in India, which has seen rapid growth with strong contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks.

The strong economic growth in the past, low defaulter ratio, absence of complex financial products, regular intervention by central bank, proactive adjustment of monetary policy and close banking culture has favored the banking industry in India in recent global financial market .The banking industry in India is divided into scheduled and non-scheduled banks. 67,000 scheduled bank branches are located in India. They consist of cooperative banks and commercial banks. The PSBs (Public Sector Banks) form the base of this sector in India. They account for 78% of the assets in the banking sector. The Private Sector banking is making headway. They are leading in mobile banking; phone banking, ATMs, and Internet Banking sectors. . Sectors of the banking industry include investment banking, retail, and private banking. Investment banking is a growing sector with more Indians looking to invest funds in mutual funds and stocks rather than the traditional fixed deposits and schemes.

Technology has played a key role in the Indian banking sector. As per the FY10 RBI release, around 90% of the public sector branches have been updated with core banking software, while around 97.8% of the public sector banks branches have been fully computerized. The trend of transactions too can be seen to have shifted from paper based to electronic based. In FY10, the share of electronic transactions to total transactions stood at around 89% in value terms and around 40% in volume terms As per RBI data there have around 25 mergers in the banking sector in the last two decades. Some of the key mergers which have taken place in the last couple of years have been Global Trust Bank with Oriental Bank of Commerce, Bank of Punjab with Centurion Bank, further Lord Krishna Bank with Centurion Bank of Punjab and then eventually with HDFC Bank, The Sangli Bank with ICICI Bank and the latest one being Bank of Rajasthan with ICICI Bank. Having a minimum capital of more than Rs. 10 billion is one of the options that RBI is contemplating as the minimum capital requirement to obtain a new bank license. Given that around eight domestic banks still have a net worth lower than Rs.10 billion, in FY10, there is further scope for consolidation. Also, this would help banks in meeting capital adequacy requirements and financing large transactions and investments made by the Indian corporate sector. The Indian Banking sector moved to the base rate system from July 2010 as against the incumbent PLR (Prime Lending Rate) system. The base rate is calculated as the cost of deposits and cost of keeping aside cash to meet CRR and SLR requirements. Retail banking is when the bank deals with individual customers rather than corporations. Services offered by these banks are normal savings, personal loans, checking accounts, and debit/credit cards amongst others. This is also a growing sector as the drive for cashless transactions is growing. . Thus, the entire banking sector is growing and offers immense potential. This is why foreign banks are increasingly establishing their base in India. JP Morgan, Standard Chartered, Bank of America, and many other international banks have established a center in India to tap its potential. FDI in this sector has been raised. 74% FDI via the automatic route is allowed in the private sector banks. This means that the aggregate foreign investment in any private bank considering all sources should be up to 74% of the paid-up capital. In the case of nationalized banks, the Portfolio and FDI investment's maximum limit is 20%. This cap also applies to the investment in state banks and other associated ones. Even with the global recession, the investment in the banking industry is still prevalent though the volume may have been reduced. FDI in India grew by 145% between 2006 and 2007 and by 46.6% during 2007–2008. The FDI in 2009 was down to 18.6%. However, with the recession abating the investments are sure to rise. The government is also encouraging foreign investment in this sector.

The most important issue is that we should pay a fee for inter-bank transactions conducted through mobile phones from April 2011, as the National Payment Corporation of India (NPCI) intends to charge lenders Rs.0.25 per transaction. " NPCI will be providing services to member banks free of charge till March 31, 2011. Thereafter, a switching fee of Rs.0.25 per transaction will be levied by NPCI on member banks," Currently, NPCI is providing inter-bank mobile payment services free of charge to seven banks - State Bank of India , ICICI Bank , Union Bank of India , Bank of India, Yes Bank , Axis Bank and HDFC Bank . Inter-bank mobile payment service (IMPS) allows a customer in one bank to remit funds to an account holder in another bank. Mobile phones are used as the service delivery channel. For providing this offer, the bank needs to have authorization from Reserve Bank of India and has to be admitted as a member of IMPS. Overall, the Indian banking industry has immense potential for further growth and expansion.