NEW DELHI: Banking services across the country will be affected on August 1 as over one million employees and officers of nationalised and foreign banks will strike work against the proposed outsourcing of banking services.

RBI circular

Addressing a press conference here on Tuesday, Ramanand, joint secretary of the All-India Bank Employees' Association (AIBEA) said the Reserve Bank of India recently permitted banks to outsource all banking services, including opening of bank accounts, withdrawal and deposit of cash, sanction and issuance of loans, to private agencies on commission and contract basis.

"The secrecy and security of millions of bank account holders will be under peril if the Government went ahead with the proposal," Mr. Ramanand said, pointing out that the public sector bank employees take the oath of secrecy before joining the service.

He said this "retrograde" decision comes in the wake of non-filling of over one lakh jobs in the nationalised banks. They stopped recruitment of staff for over 15 years.

Another major move that will seriously erode confidentiality is the decision to outsource the clearing operations to a private company. Clearing of cheques is now undertaken by the RBI, the State Bank of India and other public sector banks. Privatisation of this operation would expose the confidentiality of transactions, besides cutting jobs in the banking sector, Mr. Ramanand said.

He said it was also "dangerous" to allow 74 per cent foreign direct investment in the capital of Indian private banks along with 74 per cent voting rights. The total capital of 28 private banks in the country was around Rs. 3,500 crore whereas the deposits are to the tune of Rs. 3,50,000 crore. If foreign banks are allowed to take over them, people's money will be exposed to manipulation and speculation.

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