(AFP) Some 30,000 bank workers may become redundant under a proposal by some banks to contract out part of their backroom operations, reports said today.

The Sun newspaper said it has learnt that the central bank had given its approval as the move would further strengthen the sector following the completion of a major merger exercise in January.

It said the move involved contracting selected non-core jobs to third parties including data entry, transaction processing, payroll calculation, processing of loans and credit card dealings.

The Federation of Trade Unions of Employees in the Banking and Financial institutions has sought an urgent meeting with the central bank to discuss the matter.

The union fears some 30,000 workers would be laid off, in addition to some 10,000 estimated to have been affected by the merger of the country's 54 banking and financial houses into 10 core groups, The Star said.

"These banks are trying to outsource their functions and jobs, usually carried out by their employees, to other entities under the guise of globalisation, competition and efficiency," said the union's secretary-general J Solomon.

"Some banks are doing this without any regard for the consequence on the morale of the staff, the disharmony being created and worst of all, the effect all this has on the services to the public and the confidentiality relating to bank customers' secrecy of information.

"This is because outsourced entities do not fall under the supervision of Bank Negara nor are they governed by the Banking and Financial Institutions Act."

There are some 77,000 employees in the banking sector.