privatisation, public sector banks, Union Budget

Even during the bank mergers, employees of PSBs were impacted as the exercise hampered the career prospects of some employees.

A fear psychosis has gripped the employees of state-run banks which are the likely candidates of privatisation. They fear of job losses once the ownership of these banks are handed over to private owners. Many employees have started looking out for opportunities in other banks. But, there aren’t many options.

Moneycontrol spoke to at least two such employees in different banks.

According to different news reports, the banks which are likely being considered for privatisation are Central Bank of India, Indian Overseas Bank and Bank of Maharashtra. The total number of employees in these banks stood at around 70,870, as on March 31, 2020.

In the Union Budget, Finance Minister Nirmala Sitharaman announced the plan to privatise two PSBs apart from IDBI Bank.

Moneycontrol couldn’t independently verify these names. The government has not announced the names of final candidates which will be privatised.

Fear of job losses

Representatives of bank employees’ unions said privatisation talks have affected employee morale. To make matters worse, reports have now emerged that the Niti Aayog has recommended only one year of job security after the privatisation of the banks.

“Public sector bank employees are very upset with the news of privatisation. They are requesting us to launch agitations. In fact, there is a lot of pressure from employees, but we are waiting for the government to make an official statement on the matter first,” CH Venkatachalam, general secretary, All India Bank Employees’ Association (AIBEA), told Moneycontrol.

Venkatachalam added that PSB employees from the reserved categories are worried about reservations becoming irrelevant once their banks are privatised. Also, PSBs now have employees from the information technology (IT) sector who have joined the public sector for job security. Their professional choices will not be respected in case privatisation goes through.

There are around 10 lakh employees in 12 state-run banks in India.

Employees in the smaller banks are in a spot because they do not have the option of moving to a larger PSB either. There is no possibility for employees to move to the larger PSBs because after the mergers, there is no room for intake in banks like State Bank of India, said S Nagarajan, general secretary, All India Bank Officers’ Association.

“If they hire at all, it’s only in the specialist categories, such as IT, security or risk. The number of people needed in these categories are few and far between. So employees in the weak banks are between the devil and the deep blue sea,” Nagarajan said.

PSB jobs have been steadily losing their sheen over the last few years, with mounting work pressure and stress levels. Venkatachalam said that bank staff are facing a lot of stress because their job has become very target-oriented.

They are also being made to do non-banking business, like selling insurance. “When the investment goes wrong, the staff has to face flak for what is not their fault. Bankers don’t mind working more hours, but management must consider the conditions of work,” Venkatachalam said.

COVID – a double whammy

Already, bank employees are fighting the pandemic. There has been significant impact in the banking sector as a number of bank employees have succumbed to the pandemic.

On May 13, Moneycontrol reported that 1,200 bank employees have lost their lives to COVID-19. This number may have gone up since then as the COVID second wave has spread to more areas.

Even during the bank mergers, employees of PSBs were impacted as the exercise hampered the career prospects of some employees.

Employees who went from smaller banks to bigger ones were treated differently from existing employees when it came to promotions and roles, said a banker who didn’t want to be named.

In 2017, SBI merged its five associate banks and Bharatiya Mahila Bank with itself. Vijaya Bank and Dena Bank were amalgamated with Bank of Baroda, effective April 1, 2019. The third round of mergers came into effect on April 1, 2020, with Oriental Bank of Commerce and United Bank of India merged into Punjab National Bank, Andhra Bank and Corporation Bank into Union Bank of India, Syndicate Bank into Canara Bank and Allahabad Bank into Indian Bank.

“It is a fact that employees from the merged banks are not treated well in the new structure. In one of the large banks after the merger, employees from the smaller banks were rated differently in the promotions process,” the banker said.

Employees Moneycontrol spoke to said the privatisation will likely lead to job losses unless the Government offers some assurance.

“If moving within the public sector system was such a difficult one for bankers, we wonder how bad things could be in a private-sector setup,” said one banker requesting anonymity.

Besides merging banks, the Government in 2018 announced take over of IDBI Bank by India’s largest insurer, Life Insurance Corporation (LIC) of India. The Government also plans to privatise IDBI Bank and allow an exit to LIC. In 2019, the Reserve Bank of India had allowed LIC a 12-year period in which to lower its stake in IDBI Bank to 40 percent from 51 percent. The insurer may offload its stake in the bank sooner in view of its initial public offer.


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