Customer Service in Public Sector Banks – Is the Finance Minister Irresponsible?

A recent news report by ANI and PTI reported that a senior citizen, Surya Harijan walks many kilometres barefoot with the support of a broken chair to reach a bank to collect her pension in Odisha’s Jharigaon. They published a video of the lady walking. Without ascertaining the facts, the Finance Minister Ms Nirmala Sitharaman tweeted the video with a statement, “Can see the manager of the @TheOfficialSBI responding but yet wish @DFS_India and @TheOfficialSBI take cognisance of this and act humanely. Are they no bank Mitra? @FinMinIndia”

The Finance Minister who frequently calls the Chairman SBI should have ascertained the facts before going public instead of trying to show that she is more humane.

The facts about the video came out later, and it was reported that the video was taken on 14th April when she was walking from her daughter’s home and not to the bank.

Money Control did a fact check with the District Collector, Social Security Officer of the area, the bank manager as well as the granddaughter of the lady and published an article. General Secretary of AIBOC Com. Rupam Roy as well as General Secretary of All India State Bank Officers Federation Com. Deepak Sharma issued statements to the press questioning ANI and PTI for irresponsible reporting and a tweet #Liar_ANI_PTI was trending on Saturday evening on Twitter.

News agencies sometimes make mistakes but they do responsible reporting and act like a watchdog. For one reporter’s mistake, we can’t blame the entire agency but as vanguard of the Bank Officers’ movement the General Secretaries have rightly pointed out the mistake. The SBI management has also issued a clarification statement and assured the lady that her pension will be delivered at home hereafter. The Odisha government and an MLA have given her a wheelchair. But, there are millions of senior citizens who require better treatment.

We have to analyse the root cause of the problem. There have been many public statements by very responsible citizens about the poor customer service in SBI and other public banks.

Why is the customer service in public banks poor? SBI has 46.77 crore customers, a business of Rs.67,85,501 crores and a staff strength of 2,44,250 employees as of the last financial year. If we look at HDFC Bank, it has only 7.1 crore customers, a business of Rs.29,28,037 crores, and a staff strength of 1,41,579. Per Employee Customers in SBI is 1915 but, in HDFC Bank, it is only 501. SBI has almost 4 times the number of customers per employee when compared with HDFC. Per employee customer of ICICI is 353 and Axis Bank 325.

The same is the case with other leading private banks.

Both banks use similar technologies. Last year HDFC recruited 21,846 staff but the staff strength of SBI reduced by 1402 in spite of some recruitment.

If we look at another public bank, Bank of Baroda, it has 13 crore customers, a business of Rs.18,23,093 crore, but only 79,000 employees. Its per employee customer number is 1645. Compare this with Per employee customers of ICICI which is 353 and Axis Bank which is 325.

Without employees how do you expect customer service to improve? Banks have a provision to provide pension at home if the pensioner requests. If all pensioners or even 10% of pensioners demand doorstep service, we don’t have enough employees to serve them.

It is clearly the government that is responsible. In the year 2001, a Voluntary Retirement Scheme was announced and more than one lakh employees left the bank. This was done in the name of reform as recommended by the Narasimhan committee, which paved the way for privatization and which is the root cause of the problems with Public Sector Banks. It was the NDA government in the year 2001. Further recruitment in banks was banned for almost 10 years, whereas for private banks there was no restriction. Today, Private Banks have more employees than Public Banks.

The Finance Minister is talking about Bank Mitras. They are business correspondents. Their number increased from 16,71,170 in 2021 to 35,13,777 in 2022 as per the RBI data.

Their number is more than four times that of Bank employees, but they are poorly paid unemployed youth running Customer Service Points (CSPs). They have limited transaction rights, and they work for a commission. They are not bank employees! In the case of pension disbursement, if there is a slight difference in the signature, they cannot pay. They have to send the customer to the bank branch where the account is maintained. If all of them are converted into regular employees and CSPs are converted into micro branches with one officer and a few staff, there can be a real improvement in customer service! This will provide secured employment to more than 35 lakh young people. Will the finance minister do that and prove that she is responsible and humane?

Will the associations and unions get this done as they got recruitment restored through a strike call? Will the management of banks increase branches, and staff and convert CSPs into micro branches?