Biz per worker: How govt banks pip pvt ones.
When Anil Kumar Nayak, an account holder of a large public sector bank, lost his passbook, he was shocked to find his bank did not offer any help. “I was told nothing can be done now. A new passbook could not be issued as there was no account number.
When I requested the branch manager to search the account number by my name, he rudely replied that he did not have time. I was given a new account opening form by a peon. Please guide me how I can retrieve my account number and how to make such people accountable,” Nayak wrote on Grahak Seva, the government's customer grievances website.
The website has numerous such posts complaining about the service quality of public sector banks (PSBs). However, interestingly, RBI data shows the growth in business per employee of government-owned banks continues to outpace that of private sector lenders. The business per employee of govt banks rose by 13.2 per cent from a year earlier to Rs 11.5 crore in FY12. During this period, the business per employee of private sector banks grew by 4.3 per cent to Rs 9.9 crore.
“Post (after) the 2009 downturn, a lot of companies in the retail to customer businesses shifted from private to PSBs. This is getting reflected in the increase in business per customer. This is true (mostly) in smaller towns, where public sector banks have a wider presence than private banks. If you look at business per employee in urban areas, private banks might show a better figure than PSBs,” said Sunil Goel, director of human resource firm GlobalHunt.
Most bankers say the growth in business per staff of PSBs is primarily on account of retirement of a large number of employees. The situation is probably the outcome of a slowdown in recruitment in government-owned banks in the 1990s. It has also prompted RBI to describe the 10 years from 2010 to 2020 as the “decade of retirement”.
“While public sector banks have started recruiting new employees (in recent years), it is not commensurate with the number of people retiring. With the introduction of computers, many of the basic functions are now automated and PSBs do not require the same number of people as before. This is why the growth in business per employee is higher for PSBs compared to private banks,” said Shubhalakshmi Panse, CMD of Allahabad Bank.
Meanwhile, private banks recruited more people than public sector banks in FY12. The headcount in private banks increased by 26,391 while state-run lenders hired only 16,286 people.
Bankers also pointed out that private lenders score over government-owned banks in other parameters measuring efficiency. “The profit per employee of private banks continues to be higher than public sector banks,” said a senior executive of a Mumbai-based private sector bank.
In FY12, the profit per employee of private lenders rose by 12.8 per cent from a year earlier to Rs 10.6 lakh. During the same period, the profit per employee of state-run lenders was up 8.5 per cent to Rs 6.4 lakh.