If a company in Bangalore is working on a project related to Banking for a firm in U.S.A. This method of contracting a job is known as:

Outsourcing

The correct answer is Option (1) → Outsourcing

When a firm in one country (here, the U.S.A.) hires a company in another country (Bangalore, India) to perform specific tasks or projects—such as banking-related IT services—it is called outsourcing.