Search News

After Indian tax authorities, it's now US financial regulators' turn to train their guns on Indian BPO firms.

Expecting audits from the US comptroller of currency early next year, Indian BPO companies and captive units of multinationals are working overtime, holding discussions with consultants and their US counterparts to understand the nuances of these audits.

Most contracts in the industry allow for these kind of audits by regulators in the outsourcing firm's country.

Though details on what constitutes these audits is not forthcoming, BPO majors confirm they are aware of them and are preparing their Indian operations to face them.

The prime targets are likely to be the companies to which financial services are outsourced, especially from banks and credit card companies.

The office of the comptroller of the currency (OCC) charters, regulates and supervises national banks to ensure a safe, sound and competitive banking system in the US.

"These audits are expected early next year. Not only are they likely to check for regulatory compliance, but also for systems and procedures and risk management and confidentiality clauses being followed. We are following up with our US office to get off the ground," said Ram Aggarwal, partner, Ernst & Young. E&Y already conducts quality control reviews for several BPO units here.

Auditors from the US could come down to India to check the BPO companies here or even conduct them remotely.

A host of top international banks including American Express, Citibank, ABN Amro Bank, Barclays, HSBC and Stanchart have outsourced their financial transactions to India.
Though they began on a low key, they have ramped up operations over the years, thanks to cost savings of around 50-60% when jobs are transferred from Europe and the US.

"They have the authority to audit anywhere the financial work moves to. Our contracts already allow for it. Just as RBI can look at our transactions, they can check if the processes being laid out by the company are being followed here and if they are in line with the regulation," said Vikram Talwar, vice-chairman, EXL.

Though BPO units in India cannot pinpoint anything fundamentally wrong with the audits, they fear it could be used to discriminate against some vendors while outsourcing financial jobs.

News of the audit has shocked a section of the industry more because it comes hot on the heels of the backlash against outsourcing fading after the US elections.

Find Lawyer / Law Firm


Extradition Law in India

Every time an offender stealthily leaves India to take refuge in another country, the Government of India starts all over again with its strategy of bringing him back to the nation to make him stan More

Legal Consultation - Consult over phone, chat or send questions

Helplinelaw can set up your session with quality and experienced lawyers to discuss and resolve your legal matters. You can avail consultation in form of sending questions, phone call or webchat discussion  More