‘The rot within’ is the title of an article by Ms Purnima. S. Tripathi, wrote in Frontline magazine, in its March 25, 2022 issue. The article further states – ‘State Bank of India, India’s largest bank, is plagued with a host of problems, mostly related to wages, perks, and pensions and the latest addition to that list is management high-handedness in HR issues, which is bringing down the moral of the staff.’
She has quoted an official circular issued by the Chief General Manager (HR) of the SBI, and listed several problems, some of which are:
- Permission denied for those eligible to work from home.
- Calling officers to work on Sundays, holidays, routinely without any office order.
- Lack of empathy while carrying out transfers/postings
- Arbitrary denial of allotment of officers’ Guest House / Holiday homes.
- False closure of staff grievances without actually resolving the matter.
She adds, ‘The CGM also said that what was even more shocking was the impunity with which senior executives took such decisions, giving the impression that their actions were beyond the control of any authority in the bank.’
The article further states that senior banking officials who spoke to the Frontline admitted that the morale of the bank staff was at an all-time low. One of the serious issues discussed is the New Pension Scheme, which does not provide assured return. The young employees are not sure what is going to be the fund value at the time of their retirement, as 50-60% of the balance can be withdrawn and invested elsewhere to get a regular monthly return. The interest rates are going down and there is a proposal to privatise LIC that has been providing a monthly income plan to the retirees. It will severely affect the scheme. This scheme has been withdrawn by Rajasthan Govt and the Chhattisgarh Govt recently for its employees and from April the old assured pension scheme is going to be restored. This is not only an issue of concern among the SBI staff, but all bank employees, be it the central government employees, state government employees or the public sector employees. Why can’t the SBI, which has been a pioneer in many areas, revert to the assured pension scheme? It can invest the funds wisely and provide pension and family pension with no difficulty.
Another issue highlighted is the ‘updation of Pension’ which means that whenever there is a wage revision, the pension should also be revised as is done with central government employees. This issue is pending in various courts since 2006. This is also an issue for all banks. But SBI has a surplus in its pension funds, and it can be a pioneer to update pension.
In the famous D S Nakara vs Union of India, the Supreme court ruled-
(i) that pension is neither a bounty nor a matter of grace depending upon the sweet will of the employer and that it creates a vested right subject to 1972 rules which are statutory in character because they are enacted in the exercise of powers conferred by the proviso to Art. 309 and clause (5) of Art. 148 of the Constitution ;
(ii) that the pension is not an ex-gratia payment, but it is a payment for the past service rendered; and
(iii) it is a social welfare measure, rendering socio-economic justice to those who in the hey-day of their life ceaselessly toiled for the employer on an assurance that in their old age they would not be left in a lurch.
Various judgements have been repeating the same, but the Govt is discriminating against the bank pensioners, including SBI bank pensioners. The United Forum of Bank Unions is on an agitation demanding updation of pension, but the Union Government is busy with privatisation.
Another pension-related issue has become a big anomaly and an issue of concern at SBI. Compared to the other pensioners of public sector—who got 50% of last drawn pay as pension, in SBI, after certain pay scale it is only 40% of the last drawn pay which pensioners and employees are demanding for long to be made at par. The commutation formula at SBI is again inferior. For other Public Sector Banks, it is 9.81 years of pension, for Central Govt employees it is 8.19 years of pension but for SBI employees it is 6.6 years of pension. After all, the pension gets reduced after commutation and the bank does not lose anything. SBI can easily remove this anomaly.
To add strength to the HR issues is a letter written by the General Secretary of All India State Bank Officers Federation to the Management. The letter states, “it is a matter of great concern that the Officers are constantly being hammered with threats and are tormented in every possible way viz. misbehaviour, public humiliation, use of derogatory language, undue transfers before completion of normal tenure, cancellation of all types of leaves in humane behaviour, avoidable suspension, delay in sanctioning of increments, payment of bills, releasing of benefits etc.”
Another issue taken up by the federation is the frequent changes in the promotion policy affecting the career of young people joining SBI. Across the country, SBI employees are reporting unhappiness because of the overload of work, which was not the case a decade ago. People were leaving attractive salaries in the IT sector to join SBI as Probationary Officers. They preferred SBI because of job security, regulated working hours, promotion opportunities and security provided by the Trade Unions. But now Probationary Officers are quitting. Work-Life balance has become a serious issue. The officers are blaming the Officers Associations for long working hours and working on holidays.
The Career Development System, which I call the ‘Career Destruction System’ recommended by the Boston Consultancy Group, has huge flaws and the majority of employees are unhappy with it, which is not good for any organisation.
In the book ‘Rethinc’ Dr. T.T. Rammohan of IIM Ahmedabad explains ‘What is broken at today’s corporations and how to fix it.’ The book contains examples of two big corporations failing. In his book, ‘How the mighty fall?’ Jim Collins explains the failure of some huge corporations.
In 2008, the Royal Bank of Scotland, which was one of the top 10 banks in the world, failed. We have seen the downfall of Wells Fargo, Fannie Mae, Freddie Mae, in the banking sector, while in the insurance sector we have seen the failure of AIG. Goldman Sachs, Morgan Stanley, Bank of America, JP Morgan Chase, Citi Group etc have had their downfalls.
My memory goes back to 2017. In a central negotiation committee meeting, with the SBI management, I raised this question–’Has our bank become too big to govern that the instructions issued by the top management are not adhered to at lower level?’ Corrective steps were taken then by the then Dy Managing Director.
In 2006, when the SBI was losing market share there was a genuine self-critique done at Jodhpur with the officers, federations and the staff federation which led to a joint appeal of Chairman Shri O.P. Bhatta and General Secretaries of both the federations- Shri. GD Nadaf (Officer) and Shri. Praful Patnaik (Workmen), that led to a change. The Officers’ Federation presented a detailed plan which was discussed, accepted, and implemented.
The Officer Director and Employee Director who were on the Board played an important role, but they are not there now, though the Delhi High court has directed the bank and the government to adhere to the Law and appoint them.
As the then chairman, Mr Pratip Chaudhuri reversed the decisions of McKinsey which affected the bank. Mr Dinesh Khara put on hold the decision taken by his predecessor on the Voluntary Retirement Scheme, which would have led to an exodus.
Mr Dinesh Khara, the present chairman, is aware of all this, and he is a well-experienced banker and a good listener. I am sure the bank will soon address these issues for the benefit of its employees, pensioners, and customers, and bring back the lost glory of SBI.
Thomas Franco is the former General Secretary of All India Bank Officers’ Confederation.
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