HR crisis building up in banking sector, says officers union-Business Line
A grave human resources crisis is building up in the banking sector, according to the State unit of the All-India Bank Officers’ Confederation.
Prolonged lag in recruitment through 1987 to 2007 and proliferation of bank branches have combined to bring about the situation.
OPERATIONAL RISK
This has created a huge ‘operational risk’ to banks, according to Abraham Shaji John, State Secretary of the Confederation.
This has created a huge ‘operational risk’ to banks, according to Abraham Shaji John, State Secretary of the Confederation.
Apart from this, growing non-performing assets and restricted assets are threatening growth affecting the salary and service conditions of staff and officers.
This is the context against which the State unit of the Confederation will hold the ninth triennial State conference at Kollam on January 11 and 12, 2014, John said.
At least a thousand delegates and members are expected to attend the event, which will be held at the District Cooperative Bank Auditorium in Chinnakkada. Major highlights are a rally and the inaugural session on January 11 and a delegate session the next day.
INDUSTRY ACTION
The conference is also being held in the background of industry action called by United Forum for Bank Unions, umbrella organisation trade unions, demanding wage revision and denouncing unnecessary reforms.
The conference is also being held in the background of industry action called by United Forum for Bank Unions, umbrella organisation trade unions, demanding wage revision and denouncing unnecessary reforms.
John recalled that wage revision is due from November 1, 2012. Despite a few rounds of discussions, Indian Banks’ Association (IBA) has offered a meagre five per cent rise.
IBA has cited ‘lack of paying capacity’ as the reason for not offering anything better but it sounds hollow when viewed from the perspective of reality, John said.
WAGES DOWN
In a service industry such as banking, remuneration cannot be linked to profit. Incidentally, the banking sector has been making huge gross profit.
In a service industry such as banking, remuneration cannot be linked to profit. Incidentally, the banking sector has been making huge gross profit.
Rising non-performing assets, particularly in big-ticket advances, are due to the economic downturn or loop holes in legal framework or lack of political will, John pointed out.
Over last 20 years, wages of officers have come down by around 40 per cent when compared with peers in Centre; public sector undertakings; universities; and colleges.
John said that the performance of existing new-generation banks and foreign banks does not inspire confidence.
NOT SUSTAINABLE
New banking licenses to corporate houses and red carpet welcome for foreign banks in the guise of financial inclusion and inclusive growth are not sustainable, he said.
New banking licenses to corporate houses and red carpet welcome for foreign banks in the guise of financial inclusion and inclusive growth are not sustainable, he said.
Their contribution to priority-sector lending; direct benefit transfer of subsidies; Mahatma Gandhi National Rural Employment Guarantee Programme; financing of self-help group financing; and Government-sponsored poverty alleviation schemes is insignificant.
http://www.thehindubusinessline.com/industry-and-economy/banking/hr-crisis-building-up-in-banking-sector-says-officers-union/article5508529.ece
Also read following
To make it more worse,Banks have started recruiting officers directly from campus in higher scales to attract good officers from other banks. They are not hesitating recruiting their own kith and kin from campuses of their choice , They do not hesitate causing loss to banks by paying higher pay to such newly recruited officers . They have no shame even in creating anomalies of pay of experienced and inexperienced officers.Twenty or Thirty year experienced and performing officers are not getting salary as much as newly recruited or five year experienced officers are getting in the name of so called meritorious or specialist officers.
Bank management do not hesitate in paying higher salary equivalent to scale II or scale III to an officer but such officers are assigned the work which a clerk can perform at much lower scale. This is the key reason why even after fall in total number of staff in public sector banks , their staff cost has increased to a great extent during last ten fifteen years in comparison to that of private banks.( See above chart). In this way they can pay higher pay to whom they like . But the same top officials who are part of IBA do not agree to wage hike making excuse of load on bank.Bank management do not hesitate in keeping 30 years old working and talented officers in stagnation for years together to save cost but liberally recruit officers in higher scale paying higher pay without caring for work experience.
In the name of merit they are indulged in corrupt practices even in recruitment and promotion of employees. Under such circumstances and in such polluted and corruption inflicted environment, one cannot dream of banks remaining healthy and growing in near future.
Also read following
Top 30 defaulters of PSBs Are Rs.72000 crore
Top 30 NPAs of PSBs account for one-third of total bad loans
Gross non-performing assets amount of top 30 accounts of public sector banks stood at Rs 72,174 crore
Top 30 loan defaulters of public sector banks (PSBs) account for more than one-third of total gross non-performing assets of state-run lenders, Parliament was informed today.
"The ratio of top 30 NPAs as a percentage of gross NPAs, in respect of public sector banks, as on September 2013 is 35.5% and for all banks it is 38.8%," Finance Minister P Chidambaram said in a written reply to the Rajya Sabha.
The gross non-performing assets (GNPA) amount of top 30 accounts of public sector banks (PSBs) stood at Rs 72,174 crore, while for all banks it was Rs 91,667 crore at the end of September, 2013.
In case of nationalised banks, top 30 defaulters contributed 43.8% to the GNPA with Rs 55,663 crore.
The GNPAs of SBI Group, comprising SBI and its five associates, were worth Rs 71,620 crore at the end of first quarter of the current fiscal.
Top 30 loan defaulters of SBI group, comprising SBI and its five associates, had a loan outstanding of Rs 16,511 crore or 21.7% of the total loan.
To improve the health of the financial sector and to improve asset quality of banks, besides preventing slippages, RBI from time to time issues instructions of banks.
As per the norms, he said, each bank is required to have a robust mechanism for early detection of signs of distressed including prompt restructuring in the case of all viable accounts; to have a loan recovery policy which sets down the manner of recovery dues, targeted level of reduction and monitoring of of write-off.
In a separate response, Minister of State for Finance Namo Narain Meena said, the government has advised public sector banks to take a number of new initiatives to increases the pace of recovery and manage NPAs, which include appointment of nodal officers for recovery, to conduct special drives for recovery of loss assets and to constitute a board level committee for monitoring of recovery.
Expansion Of Banks Without Adequate Manpower
It is reported that banks will open 8000 branches this year. Such reckless expansion of branches by banks proved disastrous in seventies and eighties also when in the name of Service Area Approach, banks were advised to open branches in remote areas. Banks in order to abide by instruction of Ministry of Finance and in order to achieve the set target opened thousands of branches without ensuring adequate infrastructure and without having trained manpower to manage the branches opened in villages.
Very soon management of banks as also government of India realized that profitability of almost all public sector banks was adversely affected due to large scale expansion. Bank staffs who were posted in far flung village areas found it very difficult to survive and their families also felt stranded and isolated from society. As a consequence frustration developed in a large section of employees and their enthusiasm to work for banks got diluted and they became either indifferent to bank’s policy or became corrupt to earn money on every sanction of loan without caring for future of repayment.
Loan sanctioned by bankers in these areas were not monitored properly and a feeling developed in villages that loan given by banks are not to be refunded. Corrupt practice took the root where bankers in nexus with block officials misappropriated bank’s fund or financed to unscrupulous persons or earned huge money in form of commission or bribe .Many officers of bank as also that of state government did not hesitate even in making fake advances to loot the bank by both hands . Unfortunately banks also became sympathetic on such corrupt employees in the name of achievement of target of lending imposed by MOF in the name of social welfare schemes.
Not only this even business potential of these branches were too low to survive. Advances allowed in these branches by bank officers started going bad and ratio of Non Performing Assets (NPA or Bad debts) went on increasing. After losing a lot, government of India and management of Bank decided to close uneconomical and nonviable branches or to turn them satellite branches or to merge them with nearby bigger branches with a declaration that they will continue to serve the village allotted to such closed or merged branches. Somehow some improvement started taking place in banks and branch expansion was curtailed and controlled for a few years and the era of consolidation started.
After burning fingers in such reckless branch expansion it was thought that banks will not commit such mistake in future. But unfortunately politicians of this country are so much votes oriented that they are least bothered for health of bank, nor for bank staff and neither for villagers who are still exploited by local money lenders or micro finance institute. This is why government of India and Ministry of Finance have again started building pressure on each banks to open branches in all unbanked villages even if they are non viable, even if banks do not have adequate trained manpower to manage these rural branches and even if there is no scope of adequate business potential in these areas.
In the name of Financial Inclusion, banks are again committing the same blunder of reckless expansion as they did in seventies and eighties in the name of Service Area Approach. ‘’Old wine in new Bottle ‘’ is the fittest proverb to ascribe for banks.
After passage of a decade or so, Politicians come out with different schemes with more or less same ingredients. When they fail in one scheme, they come out with similar other scheme with difference name but the loot continues in the same fashion. Cancer of Corruption does not allow any scheme to get real success. Politicians and banks together damaged banks first in the name of Service Area Approach and now they are damaging in the name of Financial Inclusion.
So far as poor villagers or poor persons of this country are concerned, they were not happy with the system in the past and they are not happy in the present , though all such attractive polices are framed for them and meant to serve them only . It is however undeniably true that village level unscrupulous elements in nexus with state government employees and banks are exploiting bank fund for their personal gain in the name of social welfare.
Poor and unemployed youth were cheated in the name of Antodya Scheme, then in the name of Integrated Rural Development Scheme and now in the name of Financial Inclusion. Similarly unemployed youth were cheated and in turn unemployed youth cheated bank in implementation of schemes like PMRY, then PMEGP, SGSY etc . Self Help Group Scheme headed by various NGOs are looting banks in the name of creation of employment.
So far as poor villagers or poor persons of this country are concerned, they were not happy with the system in the past and they are not happy in the present , though all such attractive polices are framed for them and meant to serve them only . It is however undeniably true that village level unscrupulous elements in nexus with state government employees and banks are exploiting bank fund for their personal gain in the name of social welfare.
Poor and unemployed youth were cheated in the name of Antodya Scheme, then in the name of Integrated Rural Development Scheme and now in the name of Financial Inclusion. Similarly unemployed youth were cheated and in turn unemployed youth cheated bank in implementation of schemes like PMRY, then PMEGP, SGSY etc . Self Help Group Scheme headed by various NGOs are looting banks in the name of creation of employment.
Fifty percent of branches of every bank are having huge small amount Non Performing assets and majority of such branches are running in operation losses. More than Fifty percent of loan accounts are NPA in majority of branches and still management of bank claim to be safe and healthy.
Branches after branches are being opened every year but recruitment of additional manpower matching branch expansion is not ensured. Total manpower in most of the banks is almost the same as it was a decade ago. It means they are adding branches but not adding manpower. They recruit manpower hardly equivalent to number of bank staff retire or resign every year. Due to this unbalanced manpower policy , there is huge work load on all existing employees and this is why bank employees are abused, tortured and forced to work late hours, and work on Sundays and holidays . This is why bank employees are not in a position to properly carry out pre sanction inspection before sanction of new loan, nor they have time to monitor the advances disbursed by them and nor do they have time to follow up defaulting borrowers to ensure timely repayment of loans disbursed by them.
To add fuel to fire management of almost all banks are now suffering scarcity of experienced manpower. They have started therefore to give promotion even in two or three years of service which used to be rare possibility in seventies and eighties or even in nineties. Officers who have got no banking idea and no credit exposure are made branch head and officers who have not served in branches are made Regional Head.
To make it more worse,Banks have started recruiting officers directly from campus in higher scales to attract good officers from other banks. They are not hesitating recruiting their own kith and kin from campuses of their choice , They do not hesitate causing loss to banks by paying higher pay to such newly recruited officers . They have no shame even in creating anomalies of pay of experienced and inexperienced officers.Twenty or Thirty year experienced and performing officers are not getting salary as much as newly recruited or five year experienced officers are getting in the name of so called meritorious or specialist officers.
It is not exaggeration to say that banks are using bank's fund as charity and distributing lollipops to various officers on pick and choose basis to satisfy their ego as our politicians distribute lollipops from public fund at the time of election to attract voters.None of them are worried about the economic health of the system they work and neither the future of staff or that of voters..
In the name of merit they are indulged in corrupt practices even in recruitment and promotion of employees. Under such circumstances and in such polluted and corruption inflicted environment, one cannot dream of banks remaining healthy and growing in near future.
In brief one can say that politicians of this country who are well versed in corruption and well versed in protecting corrupt officers are leaving no stone unturned to make bankers also corrupt and to protect all corrupt bankers by hook or by crook.Clever Bankers and clever politicians are serving their personal interest at the cost of villagers , poor citizens of this country and the scarcely available fund of the country.
Thursday, July 4, 2013
Acute Shortage Of Manpower in Bank
PSU banks aim to open over 8,000 branches in FY14: FM--ET 3rd July 2013
( Read my opinion given below )
NEW DELHI: PSU banks aim to open more than 8,000 branches in the current financial year ending in March 2014, Finance MinisterP Chidambaram said on Wednesday.
Government plans to directly transfer cash benefits to bank accounts of people under various social welfare scheme over the next few years and is expanding the banking network.
Currently, more than 40 per cent of the 1.2 billion population is not covered by the banking system. Creating more branches would allow Indians, particularly those in rural areas, to get credit at a cheaper rate. Many now have to rely on money-lenders who charge up to 30 per cent interest rates.
The increase in depositors will also allow banks to expand their business and lend to the corporate sector.
Government plans to directly transfer cash benefits to bank accounts of people under various social welfare scheme over the next few years and is expanding the banking network.
Currently, more than 40 per cent of the 1.2 billion population is not covered by the banking system. Creating more branches would allow Indians, particularly those in rural areas, to get credit at a cheaper rate. Many now have to rely on money-lenders who charge up to 30 per cent interest rates.
The increase in depositors will also allow banks to expand their business and lend to the corporate sector.
Why do some win bank jobs only to turn them down?---Business Line -4th July 2013
- G. NAGA SRIDHAR
- N. S. VAGEESH
JULY 3:
It is a peculiar paradox. There is on the one hand a mad rush for bank employment and, on the other, a good number of selected candidates are rejecting job offers.
Information obtained from various banks shows that 15-20 per cent of the selected candidates do not join. This is surprising as, just in the case of the State Bank of India, over 10 lakh had applied for 1,500 probationary officer postsearlier this year. Latest data reveal that over 53,000 officers and clerks were recruited by banks in the current financial year (the process started last year), and almost every bank had a set of non-joiners. For instance, of the 730 probationary officers selected by Union Bank of India, only 583 joined. And, of the 490 to whom Vijaya Bank issued joining letters, only 380 reported for duty. Central Bank of India could fill up only 275 of the 505 trainee officer vacancies in the unreserved category.
Experts differ on the reasons for this trend. Anil K. Khandelwal, who headed a panel on human resource in public sector banks a few years back, told Business Line that place of posting is a key determinant on whether a candidate will join or not.
The other draw is higher studies. Many join up but leave soon enough discouraged by poor career prospects and dull work environment.
“I found the work environment full of politics... Sometimes, the only option available for an officer to get work done is to do it himself. The working hours are also long,” Mythili Charan Mishra from Patna said. He quit his trainee officer job in an associate bank of SBI.
Banks, however, say the situation will improve. H. S. Upendra Kamath, Chairman and Managing Director, Vijaya Bank, and M. Anjaneya Prasad, Executive Director of Syndicate Bank, expect the ratio of those joining to be higher than last year.
The previous year, candidates had a choice of offers from many banks, whereas this year, under the new system of routing, the offer will be only from one bank.
TROUBLE
But over 60,000 people who cleared the IBPS (Institute of Banking Personnel Selection) exam for officers and clerks are upset about this as it would deny opportunities for them. “Banks should immediately fill up the vacancies created by those not joining. Also, IBPS had allotted fewer candidates than what the banks require,” Zia Mandal, an aspirant complained.
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