( Please also read latest submission dated 28th March 2013 on this subject http://importantbankingnews.blogspot.in/2013/03/pubic-sector-banks-policy-of-branch.html)
In public
sector banks, clerks are not given promotion in two to three decades. If clerks
are promoted to officer cadre, the promotee officers continue to perform the
duty of clerk or that of cashier as he or she used to do before becoming
officers. Not only this, there are many scale II, scale III or scale IV
officers who are constrained to perform the duty of cashier or a dispatch clerk
or front line officer.
There are
thousands of senior level officers who are performing the duties which a clerk
of golden era ( the period just
preceding reformation era that begun in the year 1991 )could perform
satisfactorily. Many senior officers at administrative officers are performing
the duties which a low paid telephone operator or a call center guy could
perform better.
To make it more clear in term of pay package , I may say that many officers drawing pay of Rs.25000/ to Rs.50000/ per month in public sector banks are performing the job which is being done in private sector banks normally by employees drawing less than Rs.10000/ per month.
Moreover during sixties and seventies , public sector banks used to have one officer over five to six clerical staff. It means clerk to officer ratio used to be 5 : 1 or 6 : 1. As of now the situation is just opposite to it. It means in public sector banks ratio of clerk to officer is now 1: 5 or 1 : 6 . It means a bank have employees drawing average pay of Rs.40000/ per months are five related to every clerk or cashier staff drawing an average to Rs.15000 per month.
It is pity or it is unfortunate that most of top executives who holds key posts in public sector banks can deliver good speech or can please officials of RBI or MOF by submitting false and concocted information but do not have brain , do not have knowledge and do not have vision on how to increase profitability of any branch or any bank.If branch of any bank run in loss , one cannot dream of bank earning targeted profit .
There are many officers who have been though promoted to higher scale say scale IV or scale V or scale VI under pressure from some God father , they are not found fit for posting at a place of equivalent scale. Thousands of officers though promoted to higher scale continue to perform the work of lower scale. All these have resulted in increase of average pay of public sector banks vis-à-vis private banks.
To make it more clear in term of pay package , I may say that many officers drawing pay of Rs.25000/ to Rs.50000/ per month in public sector banks are performing the job which is being done in private sector banks normally by employees drawing less than Rs.10000/ per month.
Moreover during sixties and seventies , public sector banks used to have one officer over five to six clerical staff. It means clerk to officer ratio used to be 5 : 1 or 6 : 1. As of now the situation is just opposite to it. It means in public sector banks ratio of clerk to officer is now 1: 5 or 1 : 6 . It means a bank have employees drawing average pay of Rs.40000/ per months are five related to every clerk or cashier staff drawing an average to Rs.15000 per month.
It is pity or it is unfortunate that most of top executives who holds key posts in public sector banks can deliver good speech or can please officials of RBI or MOF by submitting false and concocted information but do not have brain , do not have knowledge and do not have vision on how to increase profitability of any branch or any bank.If branch of any bank run in loss , one cannot dream of bank earning targeted profit .
There are many officers who have been though promoted to higher scale say scale IV or scale V or scale VI under pressure from some God father , they are not found fit for posting at a place of equivalent scale. Thousands of officers though promoted to higher scale continue to perform the work of lower scale. All these have resulted in increase of average pay of public sector banks vis-à-vis private banks.
In public
sector banks a young officer with negligible experience (either promoted under
recommendation of some God father or recruited directly from campus) is posted
as Branch head and then he has to manage much more senior and talented officers
who have either been rejected in promotion process or who willfully boycotted promotion
process because they did not have backing of any top executive or ministers.
It is a
hard nut to crack when a less experienced officer is entrusted the duties of managing
senior old people. Similarly senior and old people finds humiliated when he or
she to work under a boss who is a person to whom he or she taught principles of
banking or to who was nourished under his guidance.
This is
only in public sector banks where officers are allowed to exercise option for
taking part in promotion processes. It means a man has the option to shoulder
higher responsibility or not. It means if a good officer does not want to
should higher responsibility he can be permitted to do so. Higher management
has created terror in the minds of good officers that on promotion he or she
may be transferred from one corner to other corner of the country if he or she
did not flatter to boss or if he or she could not follow the wrongful orders as
a disciplined soldier. This is also a cause why good officers particularly in
old age when he or she to shoulder the responsibilities of family ignore
promotion.
In
private sector banks a person with ten to fifteen years of banking experience
is given the responsibility of a branch and under him a team of at least 10 to
15 younger persons are posted who devoted work as per guidance of branch head.
You will never find in private banks that the branch head or senior officers
are counting cash and frontline newly recruited young boys and girls are
sitting idle. A job which can be done by an inexperienced low paid employee is
never entrusted to high wage paid senior officer and neither such circumstances
ever arises when high paid officers is constrained to perform the duties of cashier.
On the
contrary in public sector banks most of big or small branches have been
provided with too little number of employees that senior officers are left with
no alternative than to work as frontline clerks to maintain good customer service.
New branches in PS banks are opened with one or two manpower whereas branches
opened by private sector banks are manned by at least 10 to 15 energetic youth,
either for marketing or for performing counter work.
In this
way private sector banks attract more business with high number of low paid
employees but PS bank branches fail to attract good business with the help of
old and frustrated lot of frontline workers either as clerk or as officer. Such
type of mismanagement, such type of bad execution of good HR policies and such
type of ill treatment with old and senior people occurs only in PS banks.
Mismanagement
of human resource has been without any control continuing in public sector banks
for last two to three decades. Regulator of banks has remained more or less
silent spectator of ismanagement of Human resources. This is why corrupt
officers who spoilt the bank during their tenure as Branch head or Regional
head or Bank head got safe exit from the bank even though he or she caused loss
to the tune of hundred of crores of rupees to the bank.
It is only in public sector banks that officers are recruited as Marketing Officers are assigned the work of general banking and officers from general banking side are asked to go for market a product.Similarly officers recruited as Agriculture Officers or Field Officers or Rural Development Officer or Technical Officer are asked to work on counter and vice versa.This results in erosion in work both qualitatively and quantitatively.
It will not be an exaggeration to conclude that top executive of government banks has caused huge loss say in hundred of crores of rupees by assigning the work of clerks to officers only to fulfill their malicious intention. Because it is only officers who willingly or unwillingly say "Yes Sir " ;Sir' 'zee sir' on all orders of boss and act upon it whereas clerks seldom follow irreasonable and improper orders of the bosses.Clerical staff used to build pressure on top management and sometimes pose IR problems which put hindrance on the path of corrupt executives indulged in earning bribe and costly gifts. As such banks promoted almost all clerks to officers and stopped fresh recruitment in clerical cadre despite the fact that such action will in long run multiply staff wage bill and finally adversely affect the profitability of the bank.
Other Reasons which contributed in increase of Average pay per employee in public sector bank compared to that in private banks are as follows.
It is only in public sector banks that officers are recruited as Marketing Officers are assigned the work of general banking and officers from general banking side are asked to go for market a product.Similarly officers recruited as Agriculture Officers or Field Officers or Rural Development Officer or Technical Officer are asked to work on counter and vice versa.This results in erosion in work both qualitatively and quantitatively.
It will not be an exaggeration to conclude that top executive of government banks has caused huge loss say in hundred of crores of rupees by assigning the work of clerks to officers only to fulfill their malicious intention. Because it is only officers who willingly or unwillingly say "Yes Sir " ;Sir' 'zee sir' on all orders of boss and act upon it whereas clerks seldom follow irreasonable and improper orders of the bosses.Clerical staff used to build pressure on top management and sometimes pose IR problems which put hindrance on the path of corrupt executives indulged in earning bribe and costly gifts. As such banks promoted almost all clerks to officers and stopped fresh recruitment in clerical cadre despite the fact that such action will in long run multiply staff wage bill and finally adversely affect the profitability of the bank.
Other Reasons which contributed in increase of Average pay per employee in public sector bank compared to that in private banks are as follows.
This again refers to a comparatively study published in newspaper and comments made by Dy Governor RBI Mr. K C Chakravorty who said that average pay of bank employee in public sector banks is 150% of that in private sector banks. Public sector banks are required to perform all types of non productive work such as payment of pension, old age pension, MANREGA payment, teacher salary payment, tax collection etc which private sector banks are not doing.
It is PS banks which have to shoulder the responsibility of target for Financial Inclusion fixed by the government.
They have to open branches in remote villages where possibility of earning profit is very rare. Number of branches as such in public sector is far more than that in private sector. And the bitter truth is that majority of branches opened in rural areas are loss making and they spend their time mostly in unproductive work imposed by state or central government.
It is PS banks which have to oblige various politicians on sanction of loans and then on write off of loans. Banks have to lend under priority sector, under PMEGP programme, under SHG etc which private sector banks are not required to do.
Similarly PS banks have to lend for agriculture development, distribute UGC and taken part on all KVC projects recommended by District Industry centers. Such types of loan more often than not become bad in a year or two and then banks has to sacrifice huge money to keep their Balance sheet attractive.
On the contrary ,Private Banks do not perform and do not undertake such work which are economically not beneficial. Political loaning and political write off of loan takes place only in public sector banks, not in private banks.
On the contrary ,Private Banks do not perform and do not undertake such work which are economically not beneficial. Political loaning and political write off of loan takes place only in public sector banks, not in private banks.
As such there is no comparison between private and public sector banks. Hence effort of Dy governor Mr. Chakravorty to demoralize the employees of public sector banks and deprive them of wage hike is not justified.
Private Banks are employing 80% of their workforce at pay less than Rs10000.00 per months and only 20% of workforce get higher pay package. These banks cannot retain the employee for longer period and therefore attrition rate is much in private banks.
Public sector banks have to follow uniform wage structure as prevalent in government departments and other public sector undertakings.
To add fuel to fire public sector banks did not make any employment or made negligible recruitment since 1991 due to which average age of bank employee in PS banks is more than 45 whereas the average age in private banks is less than 30, Due to this private banks has very less load of terminal benefits payable to retiring employees ( because employees in private banks seldom retire, they resign much before ) whereas it is more in PS banks
Public sector banks have to follow uniform wage structure as prevalent in government departments and other public sector undertakings.
To add fuel to fire public sector banks did not make any employment or made negligible recruitment since 1991 due to which average age of bank employee in PS banks is more than 45 whereas the average age in private banks is less than 30, Due to this private banks has very less load of terminal benefits payable to retiring employees ( because employees in private banks seldom retire, they resign much before ) whereas it is more in PS banks
Why RBI Dy Governor does not compare the wage structure of pay package of central government employee with that of government banks?
Why he does not compare the pay package and productivity of PSUs with that of private corporate houses?
Why RBI Dy Governor does not compare the pay package of Indian railways, Indian airlines, BSNL where productivity and profitability is negligible with their counterpart in private sector (excl railways)?
Why BSNL, Railways, Airlines run in loss despite the fact that enjoy all privileges.
If MOF or RBI is still of the view that average pay of bank employees in PS banks should be reduced to some extent. I have a suggestion as given below to put before them for consideration.
It is true that due to almost non recruitment of fresh officers or fresh clerical staff during last two to three decades , average age of bank employees in many banks have gone upto 45 to 55 whereas in private banks the average age is still 20 to 25 in junior scale and 30 to 35 in higher scale.
If Public sector banks still wants that their average pay to become equal or less than their peer banks in private sector , they should come out with a Volutary Retirement Scheme (VRS) as they did in the year 2002 to kick out senior officers. By such action many incompetent officers whom bank management feel surplus and non effective for higher post may be shown the exit door and in their place fresh officers may be recruited paying much lesser salary. This will help in reducing average pay of bank employee in PS bank
In the reformation era, when full liberty was given to bank management , they almost stopped recruitment of clerks and cashiers .In the name of peaceful IR relation , management of banks chose to recruit officer directly from market. They did not hesitate to recruit officer in higher scale too by paying higher pay on joining itself.
Such unhealthy practices did not lead to corrupt practice only but also resulted in increase in average pay in public sector banks.
During pre-reformation era ,Pay package of clerks used to be almost half of that of officers recruited in scale I. Obviously bank had to pay more for doing same job which a clerk or cashier used to perform.To add fuel to fire bank recruited officers directly in scale II and III and onward which further added to wage burden.
Further bank management allotted work of clerk and cashier to senior officers and juniors and inexperienced officers directly recruited in higher scales were elevated to higher post and higher scale which not only further aggravated the illness of bank but also led to increase in bad assets and which annoyed seniors who served devoted banks for decades .
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| RBI for overhaul of banks' HR practices |
| K C Chakrabarty questions wisdom in hiring from top B-schools |
| BS Reporter / Mumbai Jun 06, 2012, 00:52 IST
The Reserve Bank of India (RBI) has called for a complete overhaul of human resource practices at banks, especially public sector ones where several staffers are due to retire in seven to eight years.
K C Chakrabarty, one of the central bank’s deputy governors, says this sort of increasing intervention in the affairs of public sector banks was needed due to lack of management capacities at the latter.
Earlier, PSBs had expressed discomfort at increasing interference from above in day-to-day operations on credit sanctioning, loan pricing, and human resource (HR) issues. The Union finance ministry had recently asked all banks to follow a uniform practice on promotion and recruitment.
At a HR summit of PSBs, Chakrabarty said: “Why are the promoters and owners being made to take a keen interest in your routine affairs? Efficient and effective HR systems are the key here. In my opinion, this may be due to something lacking in the management capacity of the banks.”
The deputy governor made these comments at an event on Saturday. A copy of the speech was put up on the RBI website on Tuesday. Saying this would be a “retirement decade” for PSBs, as tens of thousands were set to retire by 2020, he said this would be the best time to transform HR processes and implement some new-age concepts.
Indicating there was no proper mechanism of performance management in PSBs, Chakrabarty said the results of not having one could be disastrous.
“We are all having to deal with the problem of people who are ‘promotable’ but not ‘postable’ and people who are ‘postable’ but not getting promoted. This is because we have failed to discriminate between performers and non-performers,” Chakrabarty said.
He called on the senior management of banks and the board to spend more time on performance management. There is a need for complete job description and clear delineation of job roles of chairman and managing directors, and executive directors, he added.
|
Staff costs higher at public sector banks
Staff costs higher at public sector banks
MUMBAI, JUNE 6:
The average public sector bank employee is better off than his private sector counterpart. Staff cost per employee in a public sector bank is 150 per cent higher than similar costs in private banks. According to the data provided by the RBI, costs per employee in a public sector bank in 2010-11 were at Rs 7.15 lakh wheras it was Rs 5.63 lakh for a private sector.
In a speech delivered recently at a conference of public sector HR managers, the RBI Deputy Governor Dr K.C.Chakraborty, said, "One thing is, thus, loud and clear – the competitive advantage in terms of staff costs that we always thought the Public Sector Banks had is no longer there. The absence of the cost advantage coupled with the problem of lower productivity, underscore the critical need for urgent HR transformation in Public Sector Banks."
He also mentioned that per employee expenses in a public sector bank were higher despite their pension expenses not being full reflected. Calling for immediate attention to the problem, he said, HR transformation would determine their ability to compete.
Number of officers performing the work such as voucher posting, data entry in finacle, counting cash , dispatch of letters etc in a bank which should have been done by clerk is at least 20% of total number of staff in a bank. Suppose if 5000 officers are constrained to work as clerk in want of adequate number of clerical staff in a branch of a mid size bank, the bank has to pay at least two lac rupees per year officer more than what they could have paid to clerk, had there been adequate number of clerks in a branch to perform the work which officers are constrained to perform in want of adequate number of clerks in the branch.. It is remarkable to know that average pay of a clerk is Rs.2.00 lacs per year whereas that of an officer is Rs.400000/ per year.
ReplyDelete5000 X 200000 = 100 00 00000 i.e. Bank lost Rs. 100 crore per year due to faulty policy of bank.
Similarly a mid size bank has recruited thousands of officers in scale III or scale II directly from the market and they are doing the same work which otherwise a scale I officers could have performed easily. Average pay of a scale I officer is Rs. 2.5 lacs whereas that of scale II and scale III is Rs.4.5 lacs. It means excess payment of Rs. 2.00 lac per year to at least two thousand officers recruited directly from market / campus for performance special job.
2000 X 200000 = 40 00 00000 i. e. Bank lost at least Rs.40.00 crores per year.
Similarly banks have spent unwarranted money of training staff but in fact staffs were neither suitably trained nor were they effectively used to perform the work for which training was imparted.
Bank spend lacs and crores of rupees in organizing functions for inauguration of new branch, for inauguration of ATM, for celebration of renovation of a branch, red carpet welcome to dignitaries who are invited to preside such expensive functions and crores of rupees are spent in offering costly gifts to VIP dignitaries from various offices including from higher officers of the same bank who use to visit a branch or a town.
If RBI governor or Dy governor or CMD of any bank or a minister or local IAS officers, or local Member of Parliament or MLAs visit any town, each public sector bank spend lacs of rupees to extend red carpet welcome. Altogether theses expenses constitute flattery expenses incurred to win the heart of powerful officials so that such flatterers may get early promotion, good posting and acquittal from punishment if their evil works are detected by auditors and inspecting officials. Crores of rupees are spent by banks on organizing business plan conferences, on training colleges and on payment of various types of incentives every year by almost all government banks. But unfortunately most of them fail to achieve desired goal and to keep their staff happy and to keep their banks safe and profitable.
Above are also few reason why staff cost is higher in government banks and why quality is facing erosion year after year. It is not true that wage structure of bank employee is causing load on wage bill of government banks but it is mostly misuse, improper use and inadequate use of manpower employed in a bank which has caused in increasign staff cost of government banks compared to private banks.
Even though I am a Senior Manager, 50% of the work handled by me can be done by an experienced clerk. 25% of the work handled by me can be done by any officer - JMGS I or MMGS II. 5% of the work done by me can be easily performed by a senior sub-staff. 10% of my routine functions can be handled by any adult with reasonable prudence.
ReplyDeleteThus, only 10% of what I do is actually a Senior Manager's job. Then, naturally, as a Senior Manager I cannot complete what all I want to and am expected to.
This I do not out of my own volition; rather it is a forced choice for me. Then whose fault it is?
This is how precious human resources are wasted in public sector banks.
'Right man at the right place' exists only in the class rooms of the training institutes of the banks. Many holy and proven concepts like 'Unity of Command', 'Succession Planning', 'Skills Inventory', 'Performance Feedback and Performance Counselling', 'Potential Appraisal' 'Assessment of Training Needs' etc. are never respected in PSBs.
When you yourself do not treat your staff properly, then who else will respect them?
Dear sir
DeleteThinking of what job is to be done by what scale officer is nowhere described. Our only goal from 10 to 4 is customer satisfaction. Here I would like to know the job roles of different grades officers after 4 pm- which would be solely business imporvement.old generation bankers have milked the cow called benifits,both official and un official, and now imposing the carbon copy of private sector management on young officers now.
Dear Mr.D K Jain
DeleteThe Irony I have observed over the industry is that calling an official by Mr. Or Mrs. Is considered an insult.they want the old style Sir or Shri tags as token of respect. Morever why all reforms being done by top level management only now..because they are retiring and tyey need not actually folloe them. They want to be hypocrites rather than leaders..we the young generation will change the face and pace of the indusrty..good days are yet to come
Employee in private sector bank particularly lower level are frustrated. Higher managemnt exploit to lower level managers.
ReplyDeleteCan u imagine that in pvt. Sector bank,in branch their is two part one sales & one operation.u can see that if u want to survive u can choose ops.and play role as a cashier (teller) after long time work and sit on fire,at EOD BM ask what is ur productivity. One teller handling all transaction payment withdraw etc..only above Rs.50 k send to authoriser that means all risk bear by teller and tally all cash if short or excess u get one memo and u can not get rating. If u do all better entire year u got rating by BM increse ur salary only Rs.500 a month.
If u want chage ur role then u go to sales their is trmendous pressure of sales.
So we can imagine how employee exploited by senior managers.
govt. should think .
ReplyDelete