Public Sector Banks Adopt Outsourcing Mantra

Public sector banks which once rejected Reserve Bank of India's (RBI) advice to introduce outsourcing of services are now fast trying to match their performance with those in the private sector by outsourcing many of their services.

Outsourcing is no longer restricted to security services at bank premises and ATMs, or transfer of cash from currency chests to the bank branches. Other services like replenishing of cash in off-site ATMs, clearing of cheques, getting MICR bands on cheques, inter- branch reconciliation of accounts, evaluation of property pledged by loanees under the Securitization Act are now being outsourced to private agencies.

 Recently, the RBI had suggested that the PSBs outsource work for issuance of drafts, cash withdrawal, sanction and disbursement of loans and opening of bank accounts. However, various bank unions had rejected these suggestions on the pretext that “it was an effort to privatize the banks”.