Fury at Lloyds' India banking plan

EXTRAORDINARY plans to run British bank accounts from India are being considered by Lloyds TSB. The scheme would threaten up to 8,000 jobs at UK centres handling paperwork and customer calls.

Lloyds, which has 16m UK customers, is weighing up plans to set up overseas centres for some of its technology and administrative functions. India, with its lower costs, is believed to be one location being considered. Others include South Africa and China.

The proposals, also believed to include transferring some work abroad for its Scottish Widows subsidiary, will face fierce opposition from Lloyds TSB Group Union. General secretary Ian Partridge said the bank had decided on the plan and the only outstanding issue was where the new sites were to be located. He said: 'One option being considered is India. The exporting of jobs and livelihoods from the UK to India, or anywhere else, is something the union will oppose vigorously.'

A spokeswoman for Lloyds said: 'We are always looking at a full range of options to improve services to customers and efficiency, but we have no firm plans in this area. We are in the very, very early stages of this.'

An estimated 4,000 Lloyds employees work in the bank's call centres in Wales and Glasgow with a similar number in processing centres dealing with paperwork. The bank is under pressure to reduce costs, partly because its life insurance arm has been hit by plunging stock markets and it may need to bolster its finances from its reserves.

It recently recruited former BT and British Gas finance director Philip Hampton to the same role and there has been speculation that one of his first actions might be to cut its dividend to preserve cash.

Moving administration centres overseas would be another obvious step to keep a lid on expenses. If Lloyds sets up a back office operation in India, it will be following the example of British Airways, retailer GUS and healthcare company BUPA. Other banks, including HSBC and Barclays, already have some administrative centres abroad.