India’s outsourcing industry woes continue to build, with the news that Wipro is also on the World Bank’s blacklist of contractors that are banned from bidding for its contracts because of allegeded malpractice.

The third largest outsourcer in the country picked up a four year ban, running from June 2007 until 2011, after apparently allowing the World Bank CIO and other staff to buy Wipro shares when the company floated in 2000. The World Bank decided that the deal constituted improper benefits, and blacklisted Wipro, although the ban has only just come to light.

Scrutiny was turned on Satyam, in part, after the World Bank revealed that the company had received an eight year ban from World Bank business for providing improper benefits and failing to keep proper documentation regarding sub-contractor fees.

A third Indian outsourcer, Megasoft Consultants, is also serving a four year ban for carrying on a joint venture with World Bank staff at the same time as doing business with the bank. The World Bank had not previously revealed these bans, but has not said that it will announce them as they happen in future.

Wipro says that the World Bank business that it’s missing out on is not significant, and while there is no suggestion that Wipro is in anything like the same financial difficulties as Satyam, its another blow to the reputation of the Indian services sector at a time when it needs to be seen to be squeaky clean.