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U.S. taking charge of audit for Indian BPOs
By agencies
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Wednesday, 09 August 2006, 19:30 IST
MUMBAI: Outsourcing has its own pros and cons. Cheap labor stands as a boon to these US companies; nevertheless the United States Office of the Comptroller of Currency (OCC) has extended its authority to Indian shores. In charge of regulating and supervising US banks and their agencies, the OCC is going to be inspecting firms that provide offshore outsourcing services.
Staying confined to major outsourcing US banks like American Express, Citigroup and JP Morgan-Chase till date, the OCC has now made a decision to extend its jurisdiction towards the Indian BPO companies that cater to various outsourcing services like equity research, analytics and back office services to U.S. banks.
Sunil Mehta, Nasscom's spokesperson said that though the practice might seem strange, it is not a novelty. Already established in the pharmaceutical sector, A U.S. regulator auditing Indian companies may be the only way that a company can achieve efficiency.
"We can't really afford this kind of audit and it means revamping our operations to meet their requirements; but as our customers want it, we have to do it," said official company spokesperson.
With the current situation, it is likely that Indian BPO companies are heading toward a US-based control, possibly more stringent than the US FDA's controls for the pharmaceutical sector. The lack of regulations in India to monitor BPOs means the OCC will be able to enforce its norms.
The OCC has asked several small- and mid-sized BPO firms to be prepared for an inspection as a team is expected to come down to India later this year.