Date:15/07/2006 URL: http://www.thehindubusinessline.com/2006/07/15/stories/2006071503020800.htm

Back Chidambaram may discuss outsourcing issue with PSU bank chiefs

Our Bureau

New Delhi , July 14

The controversial issue of outsourcing of banking services is likely to be taken up for discussion at the meeting between the Finance Minister, Mr P. Chidambaram and the chief executives of public sector banks slated for July 21.

Bank employees have already expressed their disappointment over the Reserve Bank of India's move to allow banks to outsource banking services to private agencies on commission and contract basis. Employee associations have argued that the existing vacancies in various private and public sector banks should be filled rather than allowing outsourcing of banking services.

The banking services that are being considered for outsourcing include opening of bank accounts, issuance of draft, cash withdrawal, sanction and disbursement of loans. Besides discussing the lending targets for 2006-07, the Finance Minister is also expected to review the progress made on lending to small and medium enterprises during 2005-06. Informed sources said that the Basel-II norms and the level of preparedness of Indian banks are also likely to come up for discussion at that meeting.