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Govt eases promotion rules for PSB officers
Govt eases promotion rules for PSB officers
Mumbai: The government has relaxed the rules on compulsory rural service for officers of public sector banks to be eligible for promotions by saying the stricture can be applied prospectively.
This will enable state-run banks to promote hundreds of officers at the middle and junior management levels, even if they have not served at a rural branch.
Such officers are now eligible for promotions and can complete their rural stint after the promotion.
Recently, the finance ministry issued a note to all public sector banks saying that the requirement for compulsory rural service can be applied prospectively. Mint has reviewed a copy of the letter.
Till now, officers were required to have two to three years of experience in rural and semi-urban areas for promotion up to the level of manager, and minimum three years experience as a branch head to become eligible for promotions to higher posts such as chief and assistant general managers.
The finance ministry relaxed this requirement after some state-run banks made a representation to the government that their officers, despite being highly qualified, are being deprived of promotions as they lacked adequate rural experience.
The current relaxation, according to bankers, will benefit hundreds of middle-management officers, who are awaiting promotions.
The government wants a specified period of rural service as a precondition for promotions to ensure that those who take up bigger roles possess necessary ground-level experience in those segments.
“No bank is in a position to give rural posting for all staff. Many officers, who are otherwise eligible for higher posts, have not been getting the opportunities for promotion due to this issue till now,” the chairman and managing director of a large state-run bank said on condition of anonymity. The ministry has also exempted officers of specialist cadres such as foreign exchange, credit, technology and human resources from rural posting. Such officers will have to work in specialist cadres for at least five years before joining mainstream services. Banks have to complete the process of posting officers by June 2012.
“If you insist on rural posting as a precondition for any promotion, then banks will not be able to carry out any promotions at all. This will result in huge manpower issues in government banks. Since they have made it easier now, this will be a major positive to make the promotions faster,” said another chief of a state-run bank. He too declined to be named.
Human resource reforms in the state-run banks have been a major concern for the government and policymakers in the face of a high attrition. Besides lower compensation, slow promotion is also seen as a reason for high attrition. Reserve Bank of India governor D. Subbarao had said in late 2010 that there was a “good reason” to revisit the salary structure in government-owned banks to check losing talent to competitors in the private sector.
Appointments in state-run banks should be compulsorily made on the basis of pure merit and the rules should be flexible, according to Naresh Makhijani, partner, financial services at consulting firm KPMG.
“While public sector banks have a larger public interest in mind, the rules for promotion for an individual should be flexible and based on pure merit rather than on parameters which are not necessarily critical to growth,” Makhijani said.
To speed up personnel reforms in public sector banks, the government in 2010 appointed an expert committee under former Bank of Baroda chief Anil Khandelwal.
Later, the government set up another advisory group under Khandelwal to prepare a 10-year road map for individual state-run banks.
This committee is also looking at the technology and business process re-engineering reforms required for different state-run banks. The Khandelwal panel, which submitted its report in the middle of 2010, proposed that stock options be given to the best-performing 15% of staff, apart from better remuneration for the chairman and managing director.
Other recommendations included the induction of human resource specialists, the appointment of an executive director for the department, 50% direct recruitment of officers against 25% now, and compulsory three-year rural service for new recruits. Also, senior officers should be subject to appraisals on the basis of feedback from colleagues, subordinates and customers, the committee had suggested
Banks should ensure availability of quality manpower: Reserve Bank
Published: Friday, Apr 2, 2010, 22:34 IST
Expressing concern over the quality of manpower in the banking industry, the Reserve Bank of India (RBI) today said that Indian banks should ensure availability of capable staff to support their growth plans, a top RBI official today said.
"One of the biggest problems for the banking sector is to get quality human resource...quality means an appropriate person who can understand the challenges of banks. All the banks should focus on this issue," RBI deputy governor KC Chakrabarty said here.
Emphasising the importance of able manpower in spearheading the operations of banks, Chakrabarty said that he was concerned about the issue (quality of manpower).
"Being in-charge of the human resource management process of RBI, I am really concerned about...the quality of manpower...we must look into that," Chakrabarty said.
He was speaking at the silver jubilee celebrations of Institute of Banking Personnel Selection (IBPS), which is a body set up to offer recruitment, consultancy, training and research services to the financial services industry.
I would like to say that until there is system of Interview in promotion processes there is no guarantee that whimsical rejection or arbitrary promotions will not take place in Government Banks. Interview is the root of all maladies in all banks and in all government departments. Members of Interview panel more often than not apply their whims to select or reject a candidate ignoring completely the quality and quantity of work done by any particular officer. Various powerful officials are used by candidates as source called as Godfather to win the hearts of members of Interview panel and this give rise to flattery and bribery. As such I feel the system of Interview must be abolished completely.
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