'No privatisation of banks through outsourcing'

New Delhi, Jul 28: The Left parties today staged a walkout in the Lok Sabha to protest against the government's ''attempt at privatisation'' of public sector banks through outsourcing even as Finance Minister P Chidambaram assured the House that there was no proposal to even dilute banking functions through the ''front door or the back door.'' While Mr Gurudas Dasgupta (CPI), who raised the issue through a calling attention motion, and Mr Basudeb Acharia (CPI-M) contended that RBI had issued guidelines for handing over cheque clearing operations to a private company, Mr Chidambaram said the company would be fully owned by the banks themselves and as such it could not be construed as outsourcing or privatisation.

Mr Chidambaram made it clear that the RBI had issued draft guidelines for enabling banks to outsource only ''non-core banking activities'' and the final guidelines would be issued only after getting the opinions of the banks.

The proposed clearing corporation, owned by the banks, would be a section 25 non-profit making company. At present, there were 1,030 clearing houses in the country, of which only 16 were managed by the RBI.

The need for setting up such a corporation, suggested by the Indian Banks' Association, was felt by the banks as some of them were running several clearing houses, leaving only a few for others, he said.

The Minister also assured the House that outsourcing of non-core banking activities would not come in the way of banks opening more branches in rural areas.

Rather, it was precisely aimed at reaching out to people who were at present finding it difficult to avail institutional credit.

''It is premature to come to a conclusion that it is (the RBI move) back-door privatisation or a substitute to opening branches'' and any such presumption was based on mis-information and half information, he said.

The outsourcing proposal was the result of his Budget announcement on the involvement of civil society organisations, rural kiosks, village knowledge centres and post offices to help more and more people have access to institutional credit, rather leaving them at the mercy of private money lenders.

One of the outsourcing functions would be research and marketing which could be done best by organisations which specialised in the subject, Mr Chidambaram said and pointed out that this would result in greater efficiency and cost advantage to banks.

UNI

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