A recruitment ban in the banking sector from 1987 to 2007 and a VRS scheme in 2001 have decimated the middle management cadre in public sector banks (PSBs). This has resulted in poor succession planning, according to the All-India Bank Officers’ Confederation.
Gyaan Sangam It also feared that attempts to privatise, merge or rationalise branches in the name of pushing reforms will beat the purposes of bank nationalisation. The Confederation listed these issues for review by Gyaan Sangam, a meeting of stakeholders of the banking industry convened by the Prime Minister in Pune on Friday and Saturday.
The meeting plans to come out with a reform action plan for the banking sector, but representatives of bank employees have not been invited.
The AIBOC claims to represent 80 per cent of the officer population, and has taken on itself the task of conveying its suggestions to the Prime Minister, Finance Minister, RBI Governor, and the Department of Financial Services in the Finance Ministry, union sources said.
Efficiency of pubic sector banks, measured in terms of productivity, profitability, return on assets and return on equity, cannot be compared with those of new-generation private banks. The Confederation recalled that most achievements in financial inclusion are best attributed to the singular efforts of PSB employees but this has not been acknowledged.
Banks should refer for review to an independent body one-time settlements/write-offs and sale of assets to reconstruction companies involving accounts with balances of ₹10 crore or above. Accounts where the write-off amount is more than ₹50 lakh must also be referred for review, according to the Confederation.
Account details (including value of securities available) where write-offs have been sanctioned should be published on the bank Web site.
Bank-wise details of accounts with balances of ₹1 crore and above where write-off are granted should be published on the RBI Web site.
The veil of bankers’ secrecy should be lifted in this case by amending the relevant law. Once an account is declared an NPA, it need not be protected under the secrecy clause.
Review credit flow The stipulation that 18 per cent of bank credit should flow to agriculture needs to be reviewed since contribution of the sector to GDP has come down. There is also a need to urgently revise the classification of PSB rural branches, which continues to be based on the 1981 census.
Banks should be instructed to provide only need-based finance for agriculture and align strictly with the prescribed scale of finance, the Confederation said. False declarations/certificates on income criteria or end use of loans should be treated as offences.
Wilful default should be made a criminal offence. The relevant law should be amended to this effect, it added.