Public Sector Banks have opened hundreds and thousands of branches during last few months and years without adding equivalent number of employees in their bank. This has resulted not only in deterioration of quality of service but has also adversely affected the quality of assets, quality of lending and quality of monitoring and control over the assets.
It may be noticed from below given chart that total number of employees in public sector banks has come down from 8.83 lacs in the year 1998-99 to 7.71 lac in the year 2011-12 . In a span of 13 years of reformation , number of branches has increased at least two fold and the volume of business has gone up by at least ten times.
Though per employee business of state run bank has increased compared to that in private banks only due to labour exploitation policy adopted by these banks, the quality of assets is much better in private banks than in public sector banks.Customers get better service in private banks and investors give better value to shares of private banks.
Public Sector Banks may achieve the target of number of branches under Financial Inclusion to please their mentor ministers but may not stop escalation in resultant risk banks likely to face in future. They may not stop increase in bad assets and rise in quick mortality of assets. These banks may show little rise in profit by manipulation, they may fraudulently show bad assets as good assets by using the tools of restructuring bad assets , they may reduce provision on bad assets to book more profit and so on but such clever but suicidal fraudulent methods not for a longer period.
But no power on earth can save these banks from going from bad to worse as long as corrupt bankers are allowed to function as per their whims and fancies at the cost of quality of their assets and at the cost of joy and pleasure of human resources working at grass root level.
In brief one may say, Bank management is 'penny wise and pound foolish' ( due to self interest or under pressure from Ministry of Finance)
Bank Employees may not expect respectable wage hike if politicians continue to force banks to sacrifice profit in the name of financial inclusion or loan waiver or so called reformation.
Clerks and Junior and middle management officers are real performers but they may not perform as per their potential if they do not get recognition from their bosses who are more often than not self centered and who least bother for the safety and security of the organisation they serve.
You may also read my old blog of June 2012 on this subject http://dkjain4970901092007.blogspot.in/2012/06/average-pay-per-employee-in-private-and.html
You may also read my old blog of June 2012 on this subject http://dkjain4970901092007.blogspot.in/2012/06/average-pay-per-employee-in-private-and.html
Govt bank staff await entry of new private players--Business Line
HYDERABAD, MARCH 27:
Manoj has been watching the business papers closely ever since the Reserve Bank of India announced giving out licences for new banks. A junior officer with State Bank of India, he sees the entry of new entities into banking will not only energise the sector but also get him a lucrative job. And, he is not alone. Many among the over seven lakh public sector bank employees are hoping to switch to new private banks.
But why do existing staff want to move out, especially when there is a headlong rush to get into public sector banks?
SBI, for instance, received 17 lakh applications for just 1,500 officer’s posts this year.
“A job in a pubic sector bank is not as rosy at it appears. There is lot of work pressure and little room for career growth,” says Manoj.
Data support this. According to the RBI, in 2011-12, business per employee in public sector banks was 115 per cent against 99 per cent in private sector banks.
According to M. Harshavardhan, General-Secretary, Associate Bank Officers’ Association, some “ambitious” young employees in cadres above Deputy Manager (Scale II) and those who are nearing retirement are looking for greener pastures in private banks.
“Till recently, there was no recruitment in banks, which resulted in a lot of work pressure,” he said.
When it comes to pay, perks and promotion, he expects new private banks to offer a “better deal” especially to experienced hands.
Apparently, big corporate entities such as L&T, Mahindra & Mahindra, Bajaj, and Shriram have evinced interest in setting up banks.
Banks that have come under some pressure due to attrition at the level of clerks and junior officers are aware of the possibility of further migration of their employees to new private banks.
Says K. Subrahmanyam, Executive Director, Union Bank of India: “When new banks came up a decade ago, employees of public sector banks did move there. This will happen this time too.”
Banks make progress, but more challenges lie ahead---------Business Line
FINANCIAL INCLUSION
The villages in India are witnessing a flurry of activity, thanks to the financial inclusion initiatives of banks.
Most of the banks are now busy appointing business correspondents (BC) or opening up ultra small branches in villages under the financial inclusion plan.
As the new financial year, 2013-14, is round the corner, the focus on is meeting targets.
Mangalore-based Corporation Bank, for instance, has opened 756 ultra small branches as on December 31, 2012.
“The bank has been implementing financial inclusion with full commitment and has provided banking services to all the 1,553 villages of more than 2,000 population allotted to it under the plan,’’ a Corporation Bank official said.
Corporation Bank has the highest percentage of branches (21.5 per cent) opened by public sector banks in financial inclusion villages.
Andhra Bank, too, has covered all the allotted villages having population of above 2,000 with BC-operated banking outlets. At the end of December 2012, 6.80 lakh ‘Andhra Bank Grama Kranthi’ Savings accounts with built-in overdraft facility of Rs 500 were opened through BC agents in financial inclusion villages.
It has also taken up a special campaign to cover 100 per cent of the farmers through bank finance in service area villages.
Around 50,381 new farmers are covered with bank finance as on December-end last year.
CHALLENGING TASK
Though some progress has been achieved in this regard, there is still a long way to go. The Reserve Bank of India is of the opinion that a lot needs to be done to achieve the goal of financial inclusion.
In a recent speech, K.C. Chakrabarty, Deputy Governor, RBI, said a large number of people were still outside the ambit of banking services.
The focus should not only be on opening accounts but also ensuring proper transactions.
While over 150 million accounts were opened, only 30 million transactions have taken place up to December 2012. The “extremely low” number of transactions per account opened under financial inclusion is adversely impacting the viability of the financial inclusion efforts and would ultimately result in stakeholders losing interest in the exercise. “Banks need to identify the causes for the low transaction rates and urgently address them in order to be successful, sustainable and scalable,’’ the Deputy Governor said.
In its report on Trends and Progress in Banking 2012, RBI said universal financial inclusion “is both a national commitment and a policy priority”.
The RBI and the Union Government have taken several initiatives in this direction.
The provision of BCs in several villages has created a sense of awareness among villagers about banking.
However, major challenges remain as about 40 per cent of our population lacks access to even the simplest kind of formal financial services.
In order to make financial inclusion initiatives successful, there is a need to enlarge the number and value of transactions in no-frills accounts.
Banks should endeavour to have a BC touch-point in every village.
To make it a self-sustaining business model, banks should, over a period of time, ensure that all banking services – remittances, recurring deposits, entrepreneurial credit in the form of KCC and GCC, insurance, among others – are made available.
PRIVATE BANKS
Given the enormity of the task ahead, private banks too may be asked to take up a big role in financial inclusion.
In the new guidelines for bank licences issued in February 2012, RBI made participation in the financial inclusion exercise a must for new banks.
STUDYING THE FEASIBILITY
Some State-level bankers’ committees were also asked to examine the feasibility of allocating some villages to private banks for the purpose of financial inclusion.
According to instructions issued by the Department of Financial Services under the Union Finance Ministry, brick & mortar bank branches are to be opened in all villages across the country with a population exceeding 5,000.
All villages that are to be covered under financial inclusion should be provided with banking facilities by March 31, 2013, the Ministry said.
1.Less salary + More Power = CORRUPTION
ReplyDelete2.Insufficient Staff+ Abnormal Quantum of Work = Lack of supervision +Abnormal dependence +( Fraud and scams)
3.Powers and Responsibilities both are supplement to each other,
4.Decentralisation of Power + Maintenance of Law and Order + Impartiality= GOOD GOVERNANCE
5.Bring Change in system time to time as required = Smoothness in Management and Administration.
6. Imposition+ Monopolisation = Lack of admittance + Negative Growth.