MSB Cap to open debt servicing centre

Debt banking firm MSB Capital plans to open a captive centre in India to service its debt collection activities. The company is in the process of raising around $200,000-$250,000 (around Rs 1-1.25 crore) to start the captive centre operations in Delhi or the National Capital Region (NCR).

"We are talking to investors to raise the required capital, and expect the centre to go live by March," Pradeep Julka, vice-president (business development), MSB Capital, said.

The centre would start with 35-50 permanent employees, while 50-60 additional staff would be added as the venture gathered pace, Julka said. The centre will be managed by New York-based Paul J Coleman Associates, the authorised collection agent for MSB Cap.

MSB Cap has been in the business of buying collateralised as well as unsecured credit card-based debt from banks and other financial institutions. The firm manages $42 million (around Rs 220 crore) worth of debt in India alone.

Instead of running isolated processes, debt collection engages more deeply with the company's core business processes and is an integral part of the operations of investment banks, credit card firms and debt banking firms. Firms like Accenture and Cap Gemini have dedicated debt collection sub-verticals under their banking, financial sevices and insurance (BFSI) practice, while smaller financial institutions have been opting to set up dedicated captive centres in India to reduce costs and gain higher labour arbitrage. The BFSI vertical contributed 37 per cent of $1.62 billion in revenues from the business process outsourcing (BPO) sector in 2008, according to IDC.