Public Sector And Private Banks Gyan Sangam: Can Prime Minister Narendra Modi revive the lost charm of state-owned banks?-Economic Times08.01.15 Celebrations at state-run banks that began after Prime Minister Narendra Modi publicly declared that decades of political interference in banks decision-making has ended, is now slowly giving way to fears of challenges that come along with autonomy and accountability. The scene is that of a cricketer blaming the sorry state of the kit for his poor performance being given a brand new set of gear. The next few matches would show whether the past performance was due lack of good gear, or due to poor skills. That the health of government owned banks, which dominate the industry with three-fourths of the market share, has been deteriorating for the past few years because of mounting bad loans, is well known. The reasons for that are many — political interference, lack of capital, the middlemen menace, harassment by vigilance officers and poor quality of members of the board of directors who are there more for their proximity to ministers the than financial acumen. Now, the feel good factor needs to get converted into operating reality, says Atul Joshi, chief executive at India Ratings. It will take about 12 to 18 months to get it right. Modi, the man who has promised to cleanse the system of corruption, probably can deliver on most of the promises through legislation, or directives to finance minister Arun Jaitley with the PJ Nayak Committee recommendations as the signpost. The first change has already been delivered by splitting the job of the chairman and managing director. After promising, there would be no interference in their functioning, Modi in the days to come — with improved government finances, or bringing down its stake below 51%, — can provide more capital to banks. All the measures do not necessarily mean that state-run banks will grow to be on par with private sector peers such as HDFC Bank, or Axis Bank. Blame it on their years of neglect of human resources practices Gyan Sangam: Can Prime Minister Narendra Modi revive the lost charm of state-owned banks? Read more at: economictimes.indiatimes/articleshow/45785201.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst ‘Splitting CMD post is against minimum government, maximum governance policy’-Hindu Business Line-08.01.2015 Splitting the posts of Chairman and Managing Directors in banks goes against the policy of ‘minimum government, maximum governance,’ according toKS Bhat, Vice-President, Syndicate Bank Staff Association. The appointment of a Chairman, whether full-time or part-time, will lead to avoidable overheads and create another power centre, Bhat said. “Some banks already have three Executive Directors outside Chairman-and-Managing Director,” Bhat told Business Line. The split would also lead to delay in decision-making process. On wage talks, Bhat urged the Centre to engage directly with the latter as it does with, for instance, stakeholders in the coal industry. The coal sector with five lakh employees has been able to win most of their demands after a brief strike. But no such gains for the banking sector that employs twice as many even after two years of talks. The Centre should take immediate steps to clip the negotiation powers of the IBA, Bhat said. “There is no logic in the present offer of a 12.5 per cent rise in wages since bank employees compare poorly with those in other sectors even while discharging work of higher occupational risk and responsibilities.” He recalled that at the Gyan Sangam in Pune, the Prime Minister promised to give full autonomy to banks. But the National Organisation of Bank Workers had proposed the same in a paper submitted to the President of India as far back as in 1967, he said. On another suggestion that fresh blood needs to be infused in banks, Bhat said the infused blood also needs to be retained. The present wage structure is the main reason for the large-scale attrition in the banking sector. The present recruitment and HR policy needs to be suitably modified, he said. Trade unions want five-days a week work for PSB staff; talks on with IBA-First Business Bank employee unions have withdrawn the four-day strike call planned later this month following temporary truce with the Indian Banks Association (IBA), the industry lobby of Indian banks. IBA has been negotiating with the trade union representatives to avoid disruptions in banking services. The unions, under the United Forum of Bank Unions (UFBU), which had earlier called off the one-day nationwide strike on Wednesday, said they have decided to hold back the four-day strike originally planned from 21 January, as well. “Since we are negotiating with IBA, we wouldn’t be going ahead with the strike plan. During our talks, IBA’s approach has been positive and discussions will continue,” said a union office bearer. Both the IBA and trade unions have formed three joint-committees to look into various aspects such as pension issues of employees, wage revision and general human resource issues including the recruitment of staff and restricting the work hours to five days a week. Trade unions have pitched for five-day working for employees at state-run banks instead of the six day schedule currently, saying that they are willing to work extra hours during week days if permitted five-days week. Even though IBA has agreed to take up this demand with the finance ministry for discussion, the ministry is learned to have expressed its reservations on this demand, according to a person in the know. “The finance ministry is not very keen to cut the working hours to five days a week,” said the person, who didn’t want to be identified. Earlier, IBA improved their offer of wage revision from 11 percent to 12.5 percent even as the trade unions have come down to 19.5 percent from 23 percent earlier. Trade unions, under UFBU, which claim support of about 10 lakh employees, majority of them from 27 public sector banks, have been pressing their demand for wage revision since the last five-year bilateral contract between trade unions and IBA expired in October 2012. Unlike the past, trade unions have relatively softened their stance on the negotiations saying if they are expecting a holistic package and not just dealing with the wage revision percentage. IBA’s management committee is scheduled to meet later this month to discuss various demands of trade unions.
Posted on: Fri, 09 Jan 2015 07:01:44 +0000
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