The All India Reserve Bank Employees Association held a meeting in Ahmedabad to discuss Reserve Bank of India's [Get Quote] policies and its decision to outsource important functions. This could threaten the financial security of the country, they alleged.

Addressing reporters in Ahmedabad, Samir Ghosh, general secretary of AIRBEA, said, "The RBI is outsourcing important part of its work, which will be catastrophic."

According to him, the RBI's top management would have given due cognizance to the views of the economic and banking experts, political leaders and trade unions, and should desist from withdrawing from all operational areas in the name of redefining the role and functions of RBI. He alleged that The RBI did not pay heed to this and continued with curtailing its customer service.

"If this process of dismantling of the RBI continues, in the near future the institution of the central bank will turn into a jobless entity without any power or authority," added Ghose.

AIRBEA expressed concern over the plan to hand over the sensitive job of inspection and audit of bank branches to chartered accountant firms.

RBI is the regulator of the banking system but the supervision of banks is being virtually handed over to private chartered accountant firms. There are 50,000 branches of commercial banks to be supervised by RBI and there are only 1,200 RBI employees.

With the outsourcing of inspection and auditing of bank branches to private chartered accountant firms, "One can well understand the efficacy of such a supervision," said Ghose.

Another important function the RBI is on the verge of handing over to a private company called 'National Payments Corporation of India'. A bill to this effect is being placed before the Parliament and was sent to the Parliamentary Standing Committee on Finance for scrutiny due to serious opposition from bank employees and RBI staff.

The standing committee has recommended that it is essential that the government hold wide and in-depth consultations with various parties on the issues relating to the proposal so as to evolve a consensus.

AIRBEA further alleged this has not deterred RBI management from taking another clandestine decision in the matter of 'payment and settlement' system.

An institution, Institute of Development & Research in Banking, set up by RBI at Hyderabad to operates high value cheque clearance through the Real Time Gross Settlement system.

Now RBI has decided to hive off the operational activities of IDRBT including RTGS to a new private company to be floated soon bypassing the Parliament, in clear violation of RBI Act, 1934.

According to AIRBEA, this will be risky and already several MPs have protested to the Centre against such a secret decision of RBI.

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