NEW DELHI: Dissatisfied with Union Finance Minister P. Chidambaram's assurance that no attempt was being made to privatise the banking sector, the Left parties on Friday staged a walkout in the Lok Sabha.

They were protesting against the Reserve Bank of India (RBI) proposal to outsource some banking activities. The Communist Party of India (CPI) also issued a warning with Gurudas Dasgupta stating that the political stability of the country could be affected if the outsourcing continued.

Expressing solidarity with the bank employees who were on a daylong nation-wide strike on Friday, the Left members demanded that no banking activity be outsourced as it went against the very principle on which banks were nationalised.

The issue was raised through a call-attention motion initiated by Mr. Dasgupta, who wanted details from the Government on the situation arising from the RBI decision to allow outsourcing certain vital banking activities, including opening of accounts, issuing of drafts and clearing operations.

In his written response, Mr. Chidambaram said the RBI proposal pertained to outsourcing only some "non-core activities" in which banks may not have requisite expertise. Also, banks would only outsource those activities from which they would derive cost-benefit advantage.

The banks, he said, "cannot outsource core management functions like corporate planning, organisation, management and control, and decision-making functions like determining compliance with Know Your Client norms for opening deposit account, according sanction for loan, and management of investment portfolio etc."

Mr. Dasgupta said the RBI had already decided to outsource about 60 per cent of banking activities, and described the move as partial privatisation through the backdoor.

He found support in Basudeb Acharia of the CPI(M), who articulated his party's opposition to The Banking Regulation (Amendment) Bill, 2005.

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