Spot the irony: India's Reserve Bank says outsourcing and offshoring are risky

The Reserve Bank of India (RBI) has warned the nation's finance sector that outsourcing information technology jobs could "expose them to significant financial, operational and reputational risks." The RBI offered that opinion last week in a Statement on Developmental and Regulatory Policies that, after considering issues such …

[Brett Weaver]

Well, I mean, they would know...

Keeping your info in the cloud, in other jurisdictions, using foreign resources to develop your key software... Its just as well the the Indians have thought about it.. It might filter back to the rest of the world...

[ShadowSystems]

Foamy the Angry Squirrel said it best.

Look for the "Indian Tech Support Guy" for just how absurd the whole outsourcing craze will be by the end.

*Inserts a 99point type, bright, neon, blinking, scrolling, SARCASM tag for the bits of the audience that missed it*

[Anonymous Coward]

Re: Foamy the Angry Squirrel said it best.

The obvious question is "who do they outsource to?"

"Yer specking t' Dilip. Thy's 'aving trouble wi' t'internet, flower?"

"Sorry, can't understand your accent"

[Wedgie]

There are a few thing at play here.

For a while, Indian govt has wanted to control and have access to payment data, similar to what China has implemented. RuPay was a start but has limited adoption.

Earlier outages at HDFC & SBI enabled the RBI (regulators) to ratchet up oversight, with some of their requirements & practices being ridiculous & nonsensical.

Data localisation was the start, under the guise of privacy it’s putting data where Indian govt can exert more control. RBI decided to flex their muscles by preventing some FIs from acquiring new customers despite agreeing to proposed timelines.

Now they are going for development & operations. This is not about risks & resilience, it’s about access to their citizens data and a degree of control over their finances.

Tax evasion is a big problem in India, but this is the thin end of the wedge.

[kumarsanu]

In India SBI and RBI doing thing for better future.

https://www.prasadsacademy.com/

[trevorde]

Don't get mercenaries to defend your castle

Inherited a project which had been outsourced and then brought back in house. It was the *worst* code I have seen in 30 yrs of professional development. It had every anti-pattern imaginable and a few I'd never seen before.

Turns out the outsourcer's devs were expected to write 200 lines of code per day and were punished if they didn't meet this target. Their motivation was to write 200 lines of code; not to write nice, clean, intelligible code.

Our in house devs had the exact opposite motivation. They were paid regardless, so could concentrate on writing good code.

[Povl H. Pedersen]

Indians too expensive ?

I expect the Indians has become too expensive for Indian banks.

When they are in competition with the rest of the world, they have to pay same prices as american companies.

So of course they will outsource and enjoy all the struggle with communications, outsourcing emplyees costing half but spending 10 times as many hours etc.

All managers knows it is better to pay 10 hours @ $20/hour for low quality than 2 hours at $50/hour for good quality. That is why they outsource in the first place. But they think that since IT is moving so slow, they save paying for all the idle time.

[A random security guy]

Re: Indians too expensive ?

Indian teams are very expensive to run. I pay around 80% of what I would pay for a similar engineer here in the US. The good ones know their value. The bad ones? Don't hire them.

[Anonymous Coward]

Re: Indians too expensive ?

for the price of 1 guy in the West you get 5 guys in India.

but you may need 15 of them to do the same work (before even speaking of quality)

[Raj]

Simon gets pretty excited

... about dry central bank language. They're just doing their jobs here.

Not that Simon reported it, but India did more in IT exports last fiscal than Saudi Arabia made in oil exports.

[sketharaman]

Big Tech and Fintech

I suspect RBI is referring to product outsourcing by banks to (mostly Indian) Fintechs and (mostly foreign) Big Techs rather than workforce outsourcing to some lower-cost (foreign) country.