Every section of the society expects something or the other from the Union Budget which is an annual affair. So does the banking community; serving and retired. There are appx 13.50 lacs serving bank employees (8 lacs from the PSBs-public sector banks and 5.5 lacs employees are from the private sector banks-PVBS)At the same time there appx 7.25 lacs retirees including 1.6 lacs family pensioners. These 21 lacs bankers and ex bankers look forward to some reliefs as do all other sections. Besides, there is a little bit of banking in everybody life.Notonly the bankers and ex bankers the depositors, the stake holders, the loanees and the general public keenly watch these developments.
During the 70s and early 80s a bank officer job was considered to be one of the prime jobs. The salary of the civil servant then was similar to that of the bank officers. In the matrimonial market bank officers especially that of the public sector banks’ were one of the most sought after ones; of course after the civil servants because of the glamour and overnight recognition associated with the latter.
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Much waters have flown in river Ganges during the last 4 decades. The salary of civil servants and bankers now are simply not comparable. Even the provincial service officers and the teachers in state universities are drawing better salary now So are the employees of other PSUs.Private Banks, however, pay better especially the new generation banks although they adopt a different yardstick.
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PSBs, for that matter the banking sector does not attract the best talents these days. Now they prefer a multinational, an IT company and /or look for opportunities abroad.
The economy of the country in order to embark on a path of rapid growth needs a supportive, strong and robust banking sector. We need to have techno savvy talented youngsters who can be groomed to take over from the present leadership.
Considering the asset qualities woes during the last 07 years or so Govt had to come to rescue of PSBs and capitalized them adequately.Govt has also come out with policy and institutions which have started playing a very effective role for bringing about improvement in the banking sector. Starting with IBC and IBBI /NCLT in 2016 and NARCL/IDRCL on the recovery front and NabFID on the infrastructure finance space in last year budget the Govt has shown its intension to take things forward and bring about a sort of transformation in the banking sector. Lack of skill to assess mega infrastructure projects on the part of the traditional bankers, complexities in various clearances required for such projects and the demand and supply mismatches resulted in the deterioration of asset quality to an unprecedented level.
Now it’s time to implement the provisions envisaged in last year budget. The bad bank, the proposed IDRCL and NabFID should start functioning without further delay. In order to increase the efficiency of NCLTs/NCLATs the vacant posts be filled up on an urgent basis. The desired amendments as is being necessitated due to operational reasons be carried out expeditiously. As regards the proposed privatization of two banks as envisaged during the last budget this aspect may be dealt with bit cautiously. We already have as many as 21 PVBs .This proposed measure will take the number to 23 and PSBs number will be reduced to 10.Already the private banks have occupied 40 percent of the banking space, which was only 10 percent 30 years ago. In a transitional society such as ours we need strong PSBs and strong PVBs as well. Traditionally the PSBs are known for their reach to countryside and do a better job than the private peers in mass banking areas; be that green revolution, or the Jandhan or handling of demonetization or a pandemic situation. We are a nation with 6.38 lacs villages, more than 65 percent of our population still live in these villages. So, while we need strong PSBs to continue the social banking PVBs also need to contribute towards this end and supplement the efforts of PSBs.
The service conditions must improve in banking sectors so that we get and retain the best talents there. All the PSUs and RBI too have a 05 days week. In the era of digitization and ATMs also bankers don’t have this luxury. Concessional rate of inters for housing and conveyance is there for all bank employees; it should be aligned with the market driven rates at regular intervals. The Govt has recently acceded to the request of associations for improvement in the family pension. The Govt will do well also to empathically consider the long-standing demands for a DA merger and updating of their pension in line with RBI pensioners. Notwithstanding the favorable liquidity position in the system bank deposits continue to be the major source for country’s credit requirements.
There are hardly any concessions in tax on the bank deposits. The interest income emanating from Saving bank balance is also taxable. The retirees, the middle class always park their savings in banks because of security and liquidity. In a falling interest rate regime, they are a disappointed lot.
Thus, there is a need to expeditiously carry forward the unfinished agenda of last year budget and introduce new energy to charge the banking community; both the givers and the takers.
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