Nearly 500,000 bank workers in India, home to one of the world’s most robust outsourcing industries, walked off their jobs on Friday to protest against the planned outsourcing of their work to private domestic companies.

The one-day strike was in response to “continuing attacks on the banking industry and bank employees’ jobs and job security,” said the All India Bank Officer’s Association (AIBOA), one of the three labour unions organising the protest. Outsourcing in India’s banking industry would threaten 250,000 jobs, the unions said.

The rally is ironic given that India’s software and business process outsourcing industry is one of the country’s biggest engines of growth. Companies such as Infosys, Tata Consultancy Services and Wipro together generate billions of dollars annually from multinational companies shifting work overseas to cut costs.

But bank labour unions say their outcry is different from that of workers in rich countries who have lost jobs to India.

“We are an impoverished nation,” said RJ Sridharan, general secretary of AIBOA. “India is a labour-oriented country so we need more jobs that are secure. Developed countries have fewer hands to work.”

The Reserve Bank of India has proposed letting banks use outside agencies in India for tasks such as processing loan and credit card applications, supervision of loans and data processing.

“The world over, banks are increasingly using outsourcing as a means of both reducing cost and accessing specialist expertise,” the RBI said in a circular that contained guidelines on outsourcing financial services.

Mr Sridharan said that outsourcing “does not lead to more efficiency. It creates complications in rendering good customer service.”

He claimed that India’s banks are trying to outsource jobs with a view to offset low-cost lending to corporate sectors.

Organisers of the strike, including AIBOA, the All India Bank Employees Association and the Bank Employees Federation of India also are demanding the government stop selling off larger stakes in state-run banks, put limits on foreign direct investment, and provide broader pension coverage for bank employees.

Get alerts on Central banks when a new story is published

Copyright The Financial Times Limited 2021. All rights reserved.
Reuse this content (opens in new window) CommentsJump to comments section

Comments have not been enabled for this article.

Follow the topics in this article