Why Public Sector Banks Lag Behind?

Posted on April 14, 2012 in Business and Economy

By Dipaksh:

A couple of months ago I bumped into a friend who was reading a book titled “If God was a Banker”. I was intrigued by the title and mused how God will function as a banker; will he go for a private bank, foreign bank or our typical nationalized bank? If things were the usual then he would be one among the many aspirants for government-owned bank jobs and write many such exams. One fine morning his father (one among millions of our Gods) will hug him with the newspaper in hand which is declaring the results, and his mother will stuff his mouth with sweets wiping away tears of joy with her saree palloo. So he will be the son of every Indian middle class father’s desire and needless to say, perfect groom material. So Mr. God will start his career with oiled hair neatly parted and a lunch box in hand. He will see many springs of life in his 10-to-6 job (actually 10-to-8 in disguise) trying hard to maintain a balance with work and family. He will leave for his office while his kids are in bed and by the time he will be back they will again be in bed. So he will be cocooned in one such typical bank employee routine for many years. Finally with salt and pepper hair, swallowing lump in the throat, he will take retirement and proudly say, “It was a fulfilling job”.

This caricature of a bank employee seems ridiculous and quite filmy, unfortunately it’s true. Leave aside the glamorous private bank and foreign bank jobs; the condition of public sector bank jobs in India is pathetic. Prolonged working hours, bad working culture and slow career growth are some factors among many.

India remained untouched by the Global recession which hit the world in 2008 and our economists articulated the resilience possessed by our banking industry in this hard time. Kudos to Indian banking industry! Indian banking tree consists of RBI as central regulatory body with commercial banks and cooperative banks. Cooperative banks in turn are divided into urban and rural. Rural cooperative banks take care of agriculture, the foundation of Indian economy.

The country’s banking sector has made progress over the last five years, as is evident from many parameters, like annual credit growth, profitability, and trend in gross non-performing assets (NPAs). But when alone our public sector banks own 65% in the credit portfolio, its responsibility becomes crucial in the future and progress of India. Emergence of IT has changed the entirely the stereotype banking. From net banking to mobile banking, we have plethora of such services which have revolutionized the way we live.

Having adopted information technology, many public sector banks still seem trapped in old ‘government job’ notion and resist new changes, especially in terms of work culture. While private banks adopt new methodologies to lure customers, our public sector banks have same old pedagogy to follow. Our public sector banks are major foundation our economy and with changing times they need to rejuvenate themselves like the private or foreign counterparts, thus giving India a new momentum. So I genuinely believe healthy and professional work culture is the utmost requirement for public sector banks today. Instead of making an employee sit idly for hours together, inspiring them to be productive and tech savvy will be far more fruitful. Periodical appraisals and recognition for good work will lead to greater returns rather than making it a typical slow growing, take-for-granted government job. It’s a dismal picture that once a job of reputation is losing its value. So nowadays there is huge change in career priorities of youngsters, they prefer to experiment with their careers rather than settling and languishing in conventional government jobs.