| This has the potential of unleashing the power of commercial banking for everybody and also, as bank unions believe, that of eroding trust that banks have built over the years.
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| In a revolutionary and controversial circular aimed at further de-centralising banking activity, the Reserve Bank of India (RBI) has authorised nationalised banks to take the help of external agencies for various regular banking services and thus invited the ire of the All India Bank Employees Association (AIBEA).
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| C H Venkatachalam, general secretary of AIBEA, has threatened to launch a nationwide agitation against the move and also appealed to workmen directors on the boards of various banks to register protest and oppose the circular.
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| The activities listed in the RBI circular for outsourcing include identification of borrowers, collection and processing of loan applications, verification of primary information about borrowers, creating awareness about savings products, post-sanction monitoring, monitoring of self-help groups, follow up on loan recovery, disbursal of small value loans, recovery of principal and interest, collection of deposits, sale of various products, receipt of small value remittances, and delivery of small value payments and other payment instruments.
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| The agencies, that the RBI believes can undertake such operations, include NGOs, farmers' clubs, cooperatives, community organisations, corporate entities, post offices, insurance agents, panchayats, village knowledge centres, societies, trusts, section 25 companies, and non-banking finance companies.
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| AIBEA said the RBI has allowed these activities to be undertaken outside bank premises and yet they would be considered as having been done in normal course of banking business.
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| It has taken serious objection to what it calls an "outrageous attempt to outsource normal banking activities" and demanded immediate withdrawal of the circular. The association has also warned of prolonged agitation on the issue.
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| The RBI circular allows banks to fix and pay commission or fee to private agencies hired for doing such jobs. Banks, however, still remain responsible for all acts of omission and commission of the outsourced work and be accountable to customers, AIBEA said. It has charged that private agencies will not be made responsible for such jobs.
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| The union has viewed the exercise as an "attempt to undermine the mass banking role of banks." It said that in future banks will be dealing only with big, rich and corporate customers and noted that this was a serious deviation from the role assigned to banks as it will amount to blocking access to common people.
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| The central committee of AIBEA will meet at Delhi on March 12 and 13 to chalk out the agitational programmes and details of strike action. |
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