Bank of America is to set up a wholly-owned Indian subsidiary to provide back office transactional support services across the bank.
The new unit, dubbed Continuum Solutions, will open in Hyderabad in the second quarter of 2004. The bank says it expects to employ 500 people at the site by the end of this year and up to 1000 by mid-2005.
The unit will provide transactional support functions for processes across the mainstream consumer, commercial and corporate bank.
Earlier this month the bank announced plans to cut about 1000 technology and back office jobs in the first quarter as part of a cost-cutting drive initiated in November last year. This followed the merger agreement with FleetBoston Financial and the promise of $1.1 billion in annual cost savings.
The bank, which is already a big client of Indian software shops such as Tata Consultancy Services and Infosys, says the establishment of the Indian subsidiary will mean some job losses from existing operations but has declined specifics.