Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Politics / State-owned banks draw flak over slack recruitment policy
BackBack

State-owned banks draw flak over slack recruitment policy

State-owned banks draw flak over slack recruitment policy

Premium

Mumbai: The finance ministry is critical of human resources (HR) practices in India’s public sector banks and considers them to be “somewhat neglected".

The country’s state-owned lenders account for three-fourths of those employed in the banking industry.

At a banking conference organized by industry lobby group Federation of Indian Chambers of Commerce and Industry and Indian Banks’ Association, the apex bankers’ lobby, G.C. Chaturvedi, additional secretary, department of financial services, finance ministry, questioned the recent “massive induction of clerical staff" by public sector banks.

“We don’t realize that this (employee base) we are going to create is going to have with us for three-four decades. We have to think whether long-term human resources planning has been done for these staff, or is it ad hoc?" Chaturvedi asked while discussing HR challenges for bankers in a changing environment at the conference here.

Public sector banks shed about 10% of their employees early this century by introducing a voluntary retirement scheme as they were saddled with idle human resources. This, coupled with a freeze in recruitment, has led to an acute shortage of staff when the banks were expanding their assets rapidly till last year.

In fact, between 2003 and 2008, assets of Indian banks have more than doubled but there was virtually no change in employee strength. While banks have been recruiting people for specialized jobs such as information technology, many employees have retired and their positions have not been replenished.

Overall, the public sector banking industry is estimated to hire more than 40,000 employees in the fiscal year to March, with State Bank of India alone hiring more than 25,000.

Chaturvedi was also critical of the lack of enough experience of public sector bank officials in varied services.

“When we interview officers...we don’t find enough people who have ample experience in diverse fields of operations," he said, adding that Indian banks have to professionally train their employees.

Chaturvedi also advocated linking performance to pay and was critical of present practices while negotiating wages. “The mechanism for bipartite settlement has to be reinvented. We have to re-engineer our archaic rules and regulations to address the inflexibility and immovability in public sector banks," he said, clarifying that the unions should not be neglected but should be “taken with us".

While wage negotiations between public sector banks and staff unions isn’t over yet, state-owned IDBI Bank Ltd is in the process of implementing the first performance-linked wage for its employees.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Politics News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 10 Sep 2009, 12:48 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App