CPI opposes RBI's nod to bank outsourcing

The Communist Party of India (CPI) has opposed the Reserve Bank of India move to enable banks to contract a number of retail functions to outsiders including corporate entities. The party today said it would raise the issue in Parliament.

In a last month circular, copies of which were circulated by the CPI leaders today, the RBI allowed scheduled commercial banks including RRBs to use the services of NGOs, micro-finance institutions and self-help groups, among others.

The work sought to be offloaded included identification of borrowers, processing and submission of loan applications, post-sanction monitoring, recovery of principal and collection of interest, among others.

"This is a definite step in the direction of offloading banking business to private entities, adversely affecting the volume of work of the nationalised banks. It is a careful step in the direction of privatisation of retail banking," CPI leader Gurudas Dasgupta said at a press briefing.

"It will lead to reduction of banks' manpower and impairment of profits. We strongly oppose it. In the present environment of economic reforms, it is a subtle way of advancing towards privatising the banking business," the CPI leader said.

The CPI has also demanded that the government appeal for re-opening the Jessica Lal murder case in a higher court and hand over the probe to the Central Bureau of Investigation (CBI).

"We strongly feel that power of moneybag and political connections with the corridors of power have played this role in the failure of the police to build up the prosecution case properly," the party said.