V Subramanian, Senior Manager, Andhra Bank [ email@example.com ]
Nowadays, we very
often hear about outsourcing of bank jobs in India. What are their implications
and intricacies? What are the benefits accruing and risks involved, if we
encourage it? Why do the Trade Unions oppose it tooth and nail? Why are the
Government of India, Reserve Bank of India and Indian Banks Association very
particular about outsourcing of bank jobs?
Let us try to
find answers to these questions.
Benefits accruing from
present, the average age of a permanent bank employee is more than 45.
Moreover, there are a lot of restrictions placed by the RBI and Ministry of
Finance on fresh recruitments in banks. (Many healthy banks enjoy autonomy
which remains only on paper).
Recruitment of new personnel is a long and time-consuming process and for
immediate needs, outsourcing is the best option.
(c) The cost
of outsourcing is very cheap as compared to the average cost of hiring a
persons so employed through outsourcing usually exhibit a polite and humble
behavior and they listen to the bank officers and the customers.
cannot form trade unions and hence, they will not strike work paralyzing the
(f) If the
efficiency or performance level of the outsourced staff is not satisfactory,
their services can be terminated any moment without prior notice.
(g) It is
easier for a bank to maintain the same size of manpower so that there will
not be any undue shift or fluctuation in the work load for an average
(h) From the
customers’ point of view too, they will get their things done without any
delay or hassles. If some outsourced persons go on leave, there will be a
panel of persons waiting to perform their jobs.
Outsourcing for temporary needs is also possible.
(j) In case
of mergers and amalgamations of banks in future, the outsourced persons can
be terminated easily, without any legal claims and disputes and financial
burden to the banks.
(k) On one
side, the reality of lakhs of bank employees/officers retiring in the next 2
to 3 years is staring on our face and on the other, no bank (except SBI) is
prepared to face this eventuality, considering the record of new
recruitments made by them during the past few years. In such circumstances,
outsourcing is inevitable.
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Risks and Dangers
involved in outsourcing :
is one area that was already handed over to courier service agencies in the
1980s. We often hear of pilferage of Cheques/DDs/Dividend Warrants while in
(2) There is
no proper screening of agencies who are entrusted with outsourcing of bank
jobs. Many agencies short-listed and selected are not run on professional
antecedents of the persons deputed to the banks for performing outsourced
jobs are not verified properly and thoroughly. Nobody is bothered about
this as of now.
(4) Banks now
outsource many of their jobs like ATM Management, Telebanking, Customers’
Complaints Redressal, Debit Cards and Credit Cards issuance, Billing,
Records Maintenance and Management. But, how many possess sound knowledge
of what they are doing? Or do they have all-round experience in that filed?
have been engaging the services of private security guards for branches and
ATMs. Are not the banks aware that only 60% of what they pay reaches the
outsourced staff themselves pose risks and threats to the banks they are
associated with. There were so many incidents in the past in every bank to
(7) There is
no guarantee that the same set of people will be deployed every day or at
least for a period of 6 months continuously. Therefore, it will be
difficult to have an effective surveillance on their movements and
will be a great deal of uncertainty as to who performs what job. Regular
staff cannot be suddenly asked to perform the jobs outsourced on a regular
(9) Since the
agency pays them only a pittance, as compared to a regular staff member
doing the same or similar job, there will be no motivation and loyalty for
the outsourced persons.
will quit their present job at the earliest opportunity of getting a better
persons outsourced are not properly trained to handle a variety of related
tasks. They are made to perform only one type of job, all the 365 days of
(12) As they do
not have basic idea of how a bank branch works, they cannot handle the
customers with ease and confidence.
persons outsourced themselves do not have proper knowledge of the risks
involved in the functions handled by them. Many a time, it is observed that
they commit some grave mistakes or blunders, landing themselves and the bank
in a precarious situation. It is very difficult to clear the mess created
by them and recover the loss attributable to them.
virtue of their long association with the regular staff, some of them gain
access to the User IDs and Passwords of regular staff in course of time.
This gives them the courage to commit frauds and indulge in other types of
mischief and irregularities.
are the improprieties commonly noticed –
Transferring funds from dormant accounts to their own accounts with other
Cheating illiterate and gullible customers by withdrawing more cash from their
accounts than asked for and retaining the difference.
Some outsourced personnel are encouraged to handle regular work at the counters
by the branch managers themselves, due to acute shortage of permanent staff.
introducing themselves as regular staff to the strangers and newcomers, they
collect cash from them directly, but remit only a portion of it to their account
and swindle the remaining amount. In case of customers who have not registered
for SMS Alerts, they cannot find out this mischief/fraud immediately.
case of security guards accompanying cash meant for replenishment in ATMs and
those entrusted with the duty of guarding the ATMs, some of them indulge in
serious crime of decamping with huge cash even by assaulting other staff/general
(A) It is a
crime against the society to deny employment opportunity to the millions of
aspiring youth, on a permanent basis. Remember, ours is the second most
populated country with great degree of unemployment or under-employment.
(B) The banks
are earning huge profits with which a few hundreds of additional vacancies
can be filled in every year on a permanent basis, without any financial
new, regular employment on a large scale will contribute to higher national
income, additional demand for goods and services, growth in GDP and
collection of taxes.
ideas of a few bureaucrats and politicians shall not encourage outsourcing
of persons for doing regular work.
(E) The gains
accruing from employing people on a regular basis far outweighs the
gains/savings arising out of outsourcing.
Therefore, my vote is clearly against outsourcing.
How about you?
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