Ongoing financial crisis may hamper IT sector: RBI official

WASHINGTON: The current financial crisis may cast a pale of gloom over the country's IT sector, as 15-18 per cent business of the Indian outsourcing companies from banking, insurance, and the financial sectors has now become uncertain, a senior RBI official said.

Reserve Bank Deputy Governor Rakesh Mohan said the financial crisis in the advanced economies and the likely slowdown in these economies could impact the IT sector in India.

"About 15-18 per cent of the business coming to Indian outsourcers includes projects from banking, insurance, and the financial sectors, which is now uncertain.

The current developments with respect to the US financial markets are very eventful, and may have direct impact on the IT industry," Mohan said speaking at IMF-FSF high-level meeting on the ongoing financial turmoil here.

The National Association of Software and Service Companies (Nasscom), the IT trade body also indicated that it may revise its software export growth target downwards by few percentage points for 2008-09.

Nasscom President Som Mittal had said the downward revision is due to US financial turmoil. Nevertheless, the association believes that export will reach the $60 billion target in 2010.

Mittal said the financial crisis impacted the industry and the December review is likely to reveal the exact impact.

The current financial turmoil started with the sub-prime mortgage problem in the US, which snowballed into major crisis, leading to meltdown in some of the global financial giants.