This research paper is a comparative study of the factors, benefits and barriers affecting Indian banks’ outsourcing decisions. Exploratory factor analysis was done using employees' perception to identify the perceived factors, perceived benefits, perceived barriers of outsourcing decisions, and a comparison between the public and private banks that have been done by using an independent sample t-test. Responses of 200 bank employees were collected, working as senior managers, branch managers in public and private banks in the National capital region of India. The study found that there was no significant difference in the perception of bank employees of public and private banks for better use of resources, capitalization on technological advancements, and cost-effectiveness, except for the strategic competitive advantage and better customer service. The study also found that there exists a significant difference in the perception of bank employees for reputational benefits of outsourcing.