The average public sector bank employee is better off than his private sector counterpart. Staff cost per employee in a public sector bank is 150 per cent higher than similar costs in private banks.  According to the data provided by the RBI, costs per employee in a public sector bank in 2010-11 were at Rs 7.15 lakh wheras it was Rs 5.63 lakh for a private sector.

In a speech delivered recently at a conference of public sector HR managers, the RBI Deputy Governor Dr K.C.Chakraborty, said, "One thing is, thus, loud and clear – the competitive advantage in terms of staff costs that we always thought the Public Sector Banks had is no longer there. The absence of the cost advantage coupled with the problem of lower productivity, underscore the critical need for urgent HR transformation in Public Sector Banks."

He also mentioned that per employee expenses in a public sector bank were higher despite their pension expenses not being full reflected. Calling for immediate attention to the problem, he said, HR transformation would determine their ability to compete. 



MY VIEWS:    
This refers to a comparatively study published in newspaper and comments made by Dy Governor RBI Mr. K C Chakravorty who said that average pay of bank employee in public sector banks is 150% of that in private sector banks. Public sector banks are required to perform all types of non productive work such as payment of pension, old age pension, MANREGA payment, teacher salary payment, tax collection etc which private sector banks are not doing.

It is PS banks which have to shoulder the responsibility of target for Financial Inclusion fixed by the government.

They have to open branches in remote villages where possibility of earning profit is very rare. Number of branches as such in public sector is far more than that in private sector. And the bitter truth is that majority of branches opened in rural areas are loss making and they spend their time mostly in unproductive work imposed by state or central government.

It is PS banks which have to oblige various politicians on sanction of loans and then on write off of loans. Banks have to lend under priority sector, under PMEGP programme, under SHG etc which private sector banks are not required disbursing loans.

Similarly PS banks have to lend for agriculture development, distribute UGC and taken part on all KVC projects recommended by District Industry centers. Such types of loan more often than not become bad in a year or two and then banks has to sacrifice huge money to keep their Balance sheet attractive. Private Banks do not perform and do not undertake such work which are economically not beneficial. Political loaning and political write off of loan takes place only in public sector banks, not in private banks.

As such there is no comparison between private and public sector banks. Hence effort of Dy governor Mr. Chakravorty to demoralize the employees of public sector banks and deprive them of wage hike is not justified.

Private Banks are employing 80% of their workforce at pay less than Rs10000.00 per months and only 20% of workforce get higher pay package. These banks cannot retain the employee for longer period and therefore attrition rate is much in private banks. Public sector banks have to follow uniform wage structure as prevalent in government departments and other public sector undertakings. To add fuel to fire public sector banks did not make any employment or made negligible recruitment since 1991 due to which average age of bank employee in PS banks is more than 45 whereas the average age in private banks is less than 30,

Why RBI Dy Governor does not compare the wage structure of pay package of central government employee with that of government banks?

Why he does not compare the pay package and productivity of PSUs with that of private corporate houses?

Why RBI Dy Governor does not compare the pay package of Indian railways, Indian airlines, BSNL where productivity and profitability is negligible with their counterpart in private sector (excl railways)?

Why BSNL, Railways, Airlines run in loss despite the fact that enjoy all privileges.






Changing our Habits

Germany is a highly industrialized country. It produces top brands like Benz, BMW, Siemens etc. The nuclear reactor pump is made in a small town in this country. In such a country, many will think its people lead a luxurious life. At least that was my impression before I read this article by a traveller.

-- QUOTE—
When I arrived at Hamburg, my colleagues who work in Hamburg arranged a welcome party for me in a restaurant. As we walked into the restaurant, we noticed that a lot of tables were empty. There was a table where a young couple was having their meal. There were only two dishes and two cans of beer on the table. I wondered if such simple meal could be romantic, and whether the girl will leave this stingy guy.
There were a few old ladies on another table. When a dish is served, the waiter would distribute the food for them, and they would finish every bit of the food on their plates. We did not pay much attention to them, as we were looking forward to the dishes we ordered.

As we were hungry, our local colleague ordered more food for us. As the restaurant was quiet, the food came quite fast. Since there were other activities arranged for us, we did not spend much time dining. When we left, there was still about one third of unconsumed food on the table.

When we were leaving the restaurant, we heard someone calling us. We noticed the old ladies in the restaurant were talking about us to the restaurant owner. When they spoke to us in English, we understood that they were unhappy about us wasting so much food.

We immediately felt that they were really being too busybody. " We paid for our food, it is none of your business how much food we left behind," my colleague told the old ladies.

The old ladies were furious. One of them immediately took her hand phone out and made a call to someone. After a while, a man in uniform claimed to be an officer from the Social Security organization arrived. Upon knowing what the dispute was, he issued us a 50 Mark fine. We all kept quiet. The local colleague took out a 50 Mark note and repeatedly apologized to the officer.

The officer told us in a stern voice, " ORDER WHAT YOU CAN CONSUME, MONEY IS YOURS BUT RESOURCES BELONG TO THE SOCIETY. THERE ARE MANY OTHERS IN THE WORLD WHO ARE FACING SHORTAGE OF RESOURCES. YOU HAVE NO REASON TO WASTE RESOURCES."

-- UNQUOTE—

The mind set of people of this rich country put all of us to shame. WE REALLY NEED TO REFLECT ON THIS. We are from country which is not very rich in resources. To save face, we order large quantity and also waste food when we give others a treat.

THIS TEACHES US A LESSON TO THINK SERIOUSLY ABOUT CHANGING OUR BAD HABITS.