Are Incapable Staff, a Reason to Public Sector Banks Failure ?
Almost all the Public Sector Banks in India including State Bank of India are reeling under higher Non performing assets, bad loans and detoriating growth book. Many of the public sector banks are not able to move out of the bloom, even conducting many approachable growth in recent times. There are many reason behind so called failure of Public Sector Banks, whether external, internal, government,slower growth etc.
The success of any organization is purely depend on the human resource beside other factors but excellent workforce makes a difference especially in service Industry. Banks are categorize under service industry and the quality of workforce decide the growth. Public sector banks have captured roughly the 75% market share of banking industry, still their growth are sluggish where as the private banks with lower presence are showing a good sign of progress. Why ? it’s the smart workforce, which makes a difference.
Public sector banks recruit their officers & clerks through all India recruitment test conducted by independent body IBPS. They collect the demand of workforce from each of the public sector bank except SBI and conduct the all India exam. Successful candidates of IBPS recruitment exam are allotted the banks as per ranking. In case of SBI, they recruit through SBI recruitment board and follow the process as like IBPS.
Public sector banks and SBI are dealing in the complex financial market which requires the specialized domain knowledge. Dealing in the financial market requires professional or at least the average analytical skills but the exam conducted by IBPS or SBI doesn’t mandate any such specialization at entry level other than specialized category (which is also basic type ).
Demerit of Selection through common entrance exam
There are major demerits in recruiting the candidates through entrance exams, majorily
- Any individual with graduation degree can take the exam. There is no check on minimum marks. Candidate who is having degree in home science or history or anthropology can take the exam and join the bank.
- Subject wise final cutoff for IBPS exam are as low as 5 marks in English, 10 marks in math and similar marks in other paper. Banks are accepting these merits for taking complicated financial decisions.
- Why would bank settle with low rank candidates ? There are 19 banks allotted through IBPS and based on the choice of candidates, ranking are decided. If the final cutoff range is between 27 to 41 marks, candidates will be allotted by IBPS as per the ranking to different banks. Bank doesn’t have choice, they have to settle with candidates with low merit.
- No specialized training, rather two weeks general ineraction.
- No qualification based posting in the public sector bank. Candidates with home science degree may be posted as credit officers in the branch, who will start processing the MSME loan of millions.
- Processing a corporate loan or MSME loan require a basic knowledge and skill in finance or accounting or analytical. This is the reason why majority of the loan are falling under NPA ?
- Improper promotion on generalist manner rather than on specialized basis. I believe that professional degree makes a difference in the thinking of individual. But in public sector bank, there is no such provision, an individual with basic educational qualification can be promoted to top level. It is very commonly found in the public sector bank.
- A highly professional engineer with MBA degree working under the history gradute. Such placemements demotivate the staff and kills their efficiency.
Beside these there are many other core level issues which have to improve in order to improvise the Public Sector Bank. They will have to improve the quality of workforce, which is very much needed in current phase.
We welcome the healthy discusion on this.