Branch Expansion Without Manpower Is Too Risky

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