The pace of expansion at one of the oldest foreign banks operating in the country, the Hong Kong and Shanghai Banking Corporation (HSBC), may seem steady but slow. But its move is 'fast forward' when it comes to its 'new economy' businesses, notably electronic data processing, and insurance.

It has taken HSBC 150 long years to open 29 branches in the country -- the 29^th was inaugurated on June 28. The bank, however, cites restrictive licensing policies by the Reserve Bank of India as the main reason for this slow growth.

"It's only a few years since foreign banks were allowed to expand in the country," points out Zarir Cama, chief executive officer, HSBC India. "And even then, we were bound by RBI licensing policies in terms of where and when to open new branches." The bank has applied for licences to open branches in Ludhiana, Jaipur, Noida and Coimbatore, but is not sure where the licenses would be given.

There has been no such constraint over its 'new economy' business, the electronic data processing activity under the HSBC group subsidiary, the Hyderabad-based HSBC Electronic Data Processing India. This company carries out data processing activity for the group. For the moment, it carries out data processing for its UK operations, which will be expanded to cover the data processing activities for its US, Canada and other operations.

The unit, which is housed in a 30,000 square feet premises in Hyderabad's Hi-tech City, will move to its own, larger, custom built building, doubling its operations and working in two shifts. The next phase will see three to four more centres in the country, most likely in Pune, Bombay and Chennai.

Additionally, the company is planning a call centre with an investment estimated at $15-20 million in this operation.

Another area where the HSBC group plans to break new ground and go full steam ahead will be in the insurance sector, with an insurance broking subsidiary, as soon as the Insurance Regulatory and Development Authority (IRDA) spells out the guidelines. At the moment, the HSBC subsidiary, HSBC Insurance Services (India) P. Ltd has tied up with Tata AIG to sell third party insurance products. "Once the broking subsidiary is up, we will be free to sell anybody's insurance products. For now, we can only take the corporate agency route," says Mr. Cama.

In Pune, the "youthful" tag of the city - 35 per cent of its population is said to be made up by students - and its growing dominance in the IT sector have been the main reasons for HSBC's entry. "With such a large student population, a city can only grow," says V S Radhakrishnan, Senior Manager, western India, of HSBC Ltd. A youthful population spells demand for new age products, new services, new technologies, and new spending habits.

In response to the new age demands, HSBC, for the first time in its global 6,500 branch history, will be keeping its doors open to customers between 8 a.m. to 8 p.m., 365 days of the year. "Our ATMs (four in Pune, 112 in the country, soon to reach 250 within a year) are open 24 hours a day. This is for the first time that our customers can come and interact with our personnel any time during these extended hours," says Mr. Cama.

Pune's growing presence in the IT sector, with its concomittant young, qualified and well-paid populace, is the other factor. "Pune has a large percentage of working couples where both husband and wife are employed. But when it comes to services like home or car loans, both would like to come and discuss it with the bank. Now they can do so at their convenience, " says Mr. Radhakrishnan. HSBC also plans to extend similar facilities at some of its other branches, "depending on customer requirement".

"At the end of the day, it is not just product and price that matters. It is the quality of delivery -- the quality of technology that enables efficient service, and the timeliness of the service," says Mr. Cama. Not least, its track record. "In the history of HSBC, we have had no re-engineering, no restructuring, yet have been consistently maintaining 22 to 25 per cent profits," points out Mr. Radhakrishnan.