Australian ANZ Bank is reportedly offshoring its back-office operations in Melbourne to India by the end of the year.
According to an ANZ spokesperson most of the jobs about to be scrapped were in Melbourne with around 500 jobs being slashed.
"In 2008, the size of the operation in Bangalore grew by around 500 people and it is reasonable to expect there will be some further growth in 2009," said an ANZ spokeswoman in a statement.
However, call centres will remain in Australia and New Zealand, the bank said.
The decision has led to criticism from the Finance Sector Union, with National Secretary Leon Carter calling on the federal government to set conditions on the support it provides to Australians in the form of government guarantees.
Last year, the bank was advised by consultants to cut 620 jobs between January and September 2009, with 870 jobs identified for "offshore migration". At the time, the bank refused to quantify any local cuts.
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The move will allow ANZ to focus more on its Asian business and the latest round of cuts in Australia would boost the 3,000-strong workforce it already has in Bangalore.
Centralising the processing centre in India is part of the ANZ's plan to grow into a super-regional bank in Asia, as outlined by chief executive Mike Smith.
Late last year, the bank moved 500 back-office jobs to India as part of the transition. The jobs are separate from the 800 retrenchments ANZ announced in December affecting local employees.
Austock banking analyst John Buonaccorsi said ANZ's Smith was "more aggressive" and "less sentimental" about moving back office jobs than his predecessors, as the bank moved to centralise its processing centre ahead of regional growth.
Buonaccorsi said that typically, when a bank moved jobs to India more positions were created overseas in the process because of the lower productivity of workers relative to their Australian counterparts.
Rod Masson, policy director at the Finance Sector Union, described the cuts "scurrilous".
"It shows contempt for the Australian community and in a more targeted sense for Australian workers and finance workers."
He called on the Government to address the issue of off-shoring by banks.