No shortage of senior managers in public sector banks: Govt- Business Standard 06.05.2015
Press Trust of India
There is no shortage of senior ranked managers in public sector banks, Minister of State for Finance Jayant Sinha said in Rajya Sabha today.
"...There is no shortage of senior ranked managers in public sector banks. As of now, the banks are sufficiently staffed both at senior level as well as lower level," he said.
Replying to questions, the Minister said about 25,000 to 30,000 persons are selected each year for officers' posts in banks. The hiring for clerical posts is also in the same range.
About 15 lakh candidate appear in examination for officer level posts each year.
There are 27 public sector banks in the country.
Government has granted managerial autonomy to banks in the matters related to human resource, including recuritment as per their requirements, Sinha said.
He also said the government has separated post of Chairman and Managing Director in PSBs and there was "willingness" to bring people even from outside at top most positions in PSBs.
On delay in selection on these posts, Sinha said the process was on, but also added that "haste makes waste".
Vacancies for the position of non-executive chairman have arisen following the government decision to bifurcate the post of Chairman and Managing Director at PSU banks last year. There are eight vacancies for this slot, including at Punjab National Bank, Bank of Baroda and Canara Bank.
In December, the government had appointed Managing Director and CEO in four state-owned banks.
"...There is no shortage of senior ranked managers in public sector banks. As of now, the banks are sufficiently staffed both at senior level as well as lower level," he said.
Replying to questions, the Minister said about 25,000 to 30,000 persons are selected each year for officers' posts in banks. The hiring for clerical posts is also in the same range.
About 15 lakh candidate appear in examination for officer level posts each year.
There are 27 public sector banks in the country.
Government has granted managerial autonomy to banks in the matters related to human resource, including recuritment as per their requirements, Sinha said.
He also said the government has separated post of Chairman and Managing Director in PSBs and there was "willingness" to bring people even from outside at top most positions in PSBs.
On delay in selection on these posts, Sinha said the process was on, but also added that "haste makes waste".
Vacancies for the position of non-executive chairman have arisen following the government decision to bifurcate the post of Chairman and Managing Director at PSU banks last year. There are eight vacancies for this slot, including at Punjab National Bank, Bank of Baroda and Canara Bank.
In December, the government had appointed Managing Director and CEO in four state-owned banks.
Onus of recognising PSU banks’ contribution to nation-building rests with government-Economic Times
By Atul Joshi
Devkaran Nanjee, Sardar Dayal Singh Majithia or Chidambaram Chettyar familiar? Well, these are the founders of Dena Bank, Punjab National Bank and Indian Overseas Bank respectively.
These individuals started the journey of banking in India almost a century back. The year 1969 saw nationalisation of 14 major banks started and run privately for decades. In a second wave of nationalisation, in 1980, an additional six banks were nationalised. The key theme of nationalisation was social development and providing credit delivery to the needy across the country, especially to farmers and the small scale industries. One of the key changes was that the board would now be selected by the government.
Appointments at the chairman and managing director (CMD) and executive director (ED) level have been through the cadre of nationalised bankers.
After almost three decades, the government is considering bringing non-nationalised bankers at the helm of these banks. While there cannot be any objection to trying out a new idea, the genesis and timing need to be examined. First, vacancies of CMD and ED posts are frequent and in the recent past, have stretched over several months. This means only routine operations are carried out rather than the implementation of a well-conceived strategy, especially in these troubled times. In comparison, private banks have seen CMDs serving for over a decade or more. There has to be a succession plan in place for each bank, which has to be implemented sincerely. Second, on an average, a CMD spends two to three years at the bank. Given the banks’ size in terms of manpower and rural operations, it would need a miracle to steer the bank in a direction that is different. At best you can give it an angular shift but not a turnaround.
Private sector CMDs have been given extensions beyond 60 years, which is inconceivable for nationalised banks. Why this apartheid? Next, the lack of familiarity with the bank. Typically, the CMD comes from another bank. One needs to spend time understanding the character of the bank and its fundamental attributes and problems before taking strategic decisions. Generally, a banker spends time with the bank up to the general manager-level. Post that, for some unknown reason, the GM is transferred as ED to another bank. And once the ED spends a couple of years getting to know the bank, he is posted as CMD in a bank he is not familiar with. The musical chairs being played at the GM level and above remains mystical.
The fourth issue is that of quality and constitution of nationalised bank boards. It is not unusual to see social workers, political party nominees, trustees of religious monuments or doctors in alternate medicine on the board of nationalised banks. In some cases, professional board members are outnumbered by such independent members. This seriously limits the scope of qualitative discussions at the board-level. The question is, whose responsibility is it to provide not just the right CMD but also the right colleagues in the board? Lastly, the vigilance breathing down on PSU banks is dreadful. It is time we start trusting our selection and leave behind the British Raj legacy of not trusting the sons of the soil.
It is remarkable to have CMDs who are still willing to work and take decisions knowing the vigilance overhang. If the argument for PSU banks under vigilance is public money at stake, whose money is with private sector banks? It is time to have a level-playing field by bringing both sectors or none under the vigilance lens.
PSU banks have played a pivotal role in nation-building. The onus of recognition of this contribution and need for corrective action rests with the government as an owner-cum-manager of PSU banks. The turnaround of Indian Bank at the hands of Ranjana Kumar is a glorious chapter of Indian banking.
The call of the time is a holistic approach. Changing not just the CMD but many ways in which nationalised banks are run, controlled, managed and rewarded needs strategic vision and discretion. The ‘Kalchakra’ rotates and what goes up comes down. In the last decade of changes, we have seen ownership of many banks in Europe and the US changing from private to government.
In India, we are moving from government to private. We have seen that the most professionally and privately-managed global banks in advanced economies have failed whereas government-run banks in India have withstood the currency crisis of 1997, the dotcom bust in 2000 and the 2008 slowdown and still remained broadly stable. Nationalised bankers must have done something right then. As the saying goes, ‘Bahu ratna Vasundhara’ (Our land is full of jewels).
Are we searching though?
(The writer is the MD & CEO of India Ratings)
Link Economic Times Blog Dated 6th May 2015
Wednesday, April 15, 2015
Are Banks Facing Crisis Of Senior Officers?
This refers to news items published today that 4 to 5 lac officers in the rank of AGM and DGM are likely to retire in coming three years to create vacuum in top management. Such lame excuses are furnished before government by clever management whenever there is talk of deteriorating quality of assets in banks compared to private banks.
In the year 2000 they were talking of surplus manpower affecting profitability of banks and this is why , public sector banks offered voluntary retirement scheme to bank officers in the year 2001 to curtail manpower and to boost up profitability of banks. Now when they talk of shortage of experienced seniors I simply laugh at cleverness of Chiefs of Banks. Clever CMDs of Bank now say that due to recruitment ban or restriction from 1980 to 1990 there is shortage of seniors.Then why did they advocated VRS in the year 2001 and why did they allowed seniors to opt for VRS . Did they not have enough vision for future?
Again during the period 2005 to 2010 each of PS bank was busy in reducing manual work culture by adopting Core Banking Solution . Majority of bank works were automated during this period and some banks are still bus in reducing manual work and focusing only on online and technology oriented banking transactions .This has resulted in making manpower surplus in banks. Management of each PS banks during last years has added many non banking works such as insurance, demat services, share trading , portfolio management etc in their work profile to use surplus manpower available in their banks. Now when they talk of shortage of manpower at senior level, it is unbelievable and nothing but lame excuse to hide their inefficiency, dishonesty , lack of vision , lack of capability to use manpower in more effective way etc. If there is real shortage of seniors, why banks opt for doing business in non-banking activities keeping banks assets unguarded , monitored and putting them in risk? Further why SBI is bent upon framing fresh and new policy to weed out seniors ?
Even Finance Minister has many times suggested bank management during last few months to promote officers to scale II and III on merit to cope with shortage of senior officers in banks. It is nothing but ridiculous and dangerous advice given to corrupt bank management. Even before 1991 (reformation era beginning), management of banks used to talk of shortage of good officers and they used to give a plea that they were bound to give promotions based on seniority .In fact the culture of promotion based on seniority during seventies and eighties was much better, much judicious and efficiency booster.
Banks have been recruiting staff on the basis of merit and promoting officers to higher scale through so called merit oriented promotion policies only for last two decades and more. Still they talk of shortage of meritorious officers .It means there is large scale corruption even in process of recruitment. And if meritorious persons are recruited, how they become inefficient and unskilled after passage of time . It means meritorious officers are usually rejected in all promotion processes and only blind Yes-man of bosses and perfect flatterers and bribe earners could be elevated to top posts during last two decades of freedom enjoyed by management of each Public sector bank.
In fact merit was never respected during last two decades of freedom given to bank management .Bank management have failed to create motivation in workforce. Now they make false excuses of shortage of good officers. And to add fuel to fire , bank management has started promoting even unskilled and inexperienced officers to higher scales in two to three years which will cause further loss to bank in coming days.
Media men blindly publish the news without verifying its correctness. There are hardly nine lac employees in public sector banks which comprises of not only executive level officers from AGM to GM but also includes class IV employees like peon, clerical staff, offices in scale I , II and III and scale IV. It is beyond imagination that there are 4 lac officers in AGMs and DGMs in Public sector banks. There are hardly four thousand such officers who are in the rank of AGM and above. And if it is true that there are 4 to 5 lac officers in the rank of AGM and DGM, it is the greatest scam of the country because it cause monetary loss in many ways.
Management of banks are indulged in large scale scam in recruitment and it is they who are causing loss to banks by recruiting officers directly in scale II and III or IV to oblige sons and daughters and kith and kin of top officials of banks and other VIP politicians, always in the name of merit only. It is these directly recruited officers who in lack of adequate experience and sufficient exposure in various activities related to banks are causing much losses to banks.
Banking is a service oriented industry and Banks need experienced officers who are well versed in banking and who understand the risk factors of lending and various types of operational works. Such offices may not be found in IIM or other campuses. Bank management like campus recruitment only to give higher pay packages to fresher as per their sweet will , not to improve banking service. It is proved during last ten to twenty years of freedom they enjoyed in recruitment and in promotions.
There are lacs of senior officers who have not been promoted only because there are not perfect Yesman of top officials. Even now there is no scarcity of good and experienced officers in scale I , II or III in any of PS banks. There are many clerical staff who are undoubtedly better than even officers , but they do not like to accept promotion due to bad management or they are not promoted to officer grade because they are not perfect flatterer to their immediate bosses. This is why many scale III or IV officers are performing the work of clerks and many clerical staff and junior officers are performing work of executives. More often than not , executives are unskilled but good speakers only.
In last month only SBI chief told that they will come out with a policy to weed out seniors and the same CMD of SBI is now talking of shortage of seniors .
In the year 2000- 2001 thousands of meritorious officers in senior rank opted for voluntary retirement scheme only because they were totally unhappy with treatment given to them by their bosses.
And it is important to point out here that the same officers who joined private banks after resigning from PS banks in the era of 1991 banking reform are now earning huge profits for private banks. Officers become meritorious as soon as they join private banks after resigning from PS Bank. Why?
There is no respect to merit or experience in banking and hence health of banks in general is moving from good to bad and bad to worse. Media men either do not understand the bitter truth of bank management or they are publishing news in lieu of money they get. They should try to get correct data of manpower In each grade and each scale before publishing such news . CMD of bigger banks are greater master in telling lie and in befooling government compared to smaller banks. This is why banks like SBI, PNB, BOB, IOB which were considered as top banks two decades ago are now considered as worst banks so far as asset quality of bank is concerned. It is they who did not make even sufficient provision for bad assets and for terminal benefits payable to retiring staff. just to give a artificial boost to profit and earn incentive. "Gau markar Juta Dan". Everyone remember , how few years ago , RBI allowed banks to amortize accumulated provision for five years to avoid loss in a particular Financial year.
Profitability of PS bank , Return on assets and Return on equity of each bank has sharply come down during last two decades . But clever Chiefs of bank talk about per employee business which has gone up to some extent only because these banks have curtailed manpower to a great extent when bank became automated and started functioning without use of manpower. These banks doubled their branch network but kept their total manpower almost same or less than what it was a few years ago. Only due to exploitation of staff , these banks are able to increase profit .
Still profit is not as it should be and as private banks are earning with same level of business. Average pay per employee in public sector bank is more than that of private banks. Because in private banks , pay package is fixed as per quality of work a staff perform. Whereas in PS banks, same type of work is done by clerk, officers in scale I or II or III or IV. In PS banks a staff become scale III after completing three decade long service whereas top officials directly recruit officer in scale III and make him scale IV or V . In this way they punish experienced officer and inculcate culture of bribery and flattery .
Even RBI and Ministry of finance do not understand or do not like to understand the real reason behind worsening asset quality of PS bank . They are misguided by gang of corrupt top officials and this is why instead of striking at root cause of sickness of banks, RBI officials or Ministers are suggesting recruiting ED and CMD from other bank or contemplating increasing incentive and pay packages of ED and CMD. MOF is suggesting various frameworks for recruitment of ED and CMDs of banks but not ready to peep into lower level recruitment and promotions.
I can say without any doubt and without any hesitation that health of PS banks cannot improve by changing only Chief of banks or by increase in pay package of Chief of banks. Need of the hour is to punish corrupt officials who in the name of merit promoting flattery and bribery and who are humiliating experienced and seniors by promoting extremely juniors to top posts.
I submit bellows the copy of news published today in Financial express:
Nearly 4 lakh public sector bank AGMs, DGMs to retire in 4 years-Financial Express 15th April 2015
In three to four years, most AGMs and DGMs in the country’s public sector banks will retire and there will be a vacuum at the senior level. The banks are still not able to make room for specialists and lateral entry for talent is a problem, says Achintan Bhattacharya, director, National Institute of Bank Management (NIBM). Recruitment of probationary offices is restricting banks from taking specialists directly and this needs to change, he says.
If the banks depend on PO level recruitment, there will be a vacuum for 20 years as there has been no recruitment since the 1980s and there won’t be enough talent available as it takes around 20 years to bring up people up to that level, says the NIBM director. Around 4,00,000 officer-level retirements are expected in three to four years with all of them in the 55-plus age group. GM levels posts are lying vacant in banks, says Bhattacharya.
Banks have failed to get talent from the market as these professionals are used to working in an environment where they are not chained by corporate governance norms which public sector institutions demand, there are no incentives for performance and the salary levels at the senior level at PSU banks are much lower compared to private sector bank, points out Bhattacharya. Banks also do not have the option of going down the ladder, he adds.
It was the human resource crunch in the PSU banks that led to the NIBM starting its post graduate programme in banking and finance in 2003-04 later rechristened as Post Graduate Diploma in Management Banking and Financial Services. But they too are not getting the compensation they deserve and it takes 10 years to move to levels up. After graduating from NIBM, students enter at Grade II levels of PSU banks but they should get much better rewards, says Bhattacharya. This year 54 students graduated and there has been 100% placement record with some opting for the private sector. NIBM is doing its bit to expand the talent poll for banks. Bhattacharya said NIBM is planning to increase the intake of students. It is a building a 240-room hostel for the PGDM course as it is run as a residential programme and needs room to accommodate additional students. The institute has started work on creating additional infrastructure at the NIBM campus with investments of around Rs 60 crore to Rs 70 crore, Bhattacharya said.
If the banks depend on PO level recruitment, there will be a vacuum for 20 years as there has been no recruitment since the 1980s and there won’t be enough talent available as it takes around 20 years to bring up people up to that level, says the NIBM director. Around 4,00,000 officer-level retirements are expected in three to four years with all of them in the 55-plus age group. GM levels posts are lying vacant in banks, says Bhattacharya.
Banks have failed to get talent from the market as these professionals are used to working in an environment where they are not chained by corporate governance norms which public sector institutions demand, there are no incentives for performance and the salary levels at the senior level at PSU banks are much lower compared to private sector bank, points out Bhattacharya. Banks also do not have the option of going down the ladder, he adds.
It was the human resource crunch in the PSU banks that led to the NIBM starting its post graduate programme in banking and finance in 2003-04 later rechristened as Post Graduate Diploma in Management Banking and Financial Services. But they too are not getting the compensation they deserve and it takes 10 years to move to levels up. After graduating from NIBM, students enter at Grade II levels of PSU banks but they should get much better rewards, says Bhattacharya. This year 54 students graduated and there has been 100% placement record with some opting for the private sector. NIBM is doing its bit to expand the talent poll for banks. Bhattacharya said NIBM is planning to increase the intake of students. It is a building a 240-room hostel for the PGDM course as it is run as a residential programme and needs room to accommodate additional students. The institute has started work on creating additional infrastructure at the NIBM campus with investments of around Rs 60 crore to Rs 70 crore, Bhattacharya said.
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