New questions have emerged about the state of corporate governance in India’s technology sector after it was confirmed that two of the country’s major IT firms have been blacklisted by the World Bank.

Wipro, India’s third-largest IT outsourcing company, said its ban was imposed in June 2007 after the World Bank said it had provided “improper benefits to bank staff” while working with the institution.

Another firm, Megasoft Consultants, was blacklisted for four years in December 2007 for operating a joint venture with World Bank staff while working with the organisation.

Wipro’s case relates to an initial public offering (IPO) of American depository shares conducted in 2000 when Wipro was listed on the New York Stock Exchange. The company offered shares to bank employees and clients at the IPO price.

In a statement, Wipro said the scheme is “commonly utilised” and approved by the US market regulator, the Securities and Exchange Commission.

The company’s ban from contesting direct contracts from the World Bank will expire in 2011.

News of the bans comes after Satyam, the IT outsourcing firm at the centre of a $1 billion accounting fraud scandal, revealed it had been blacklisted by the World Bank.