PSU BANKS' HR CRISIS LOOMING LARGE

By Ruma Dubey

Come 2018 and all the current CEOs of public sector banks will retire. In 2019,  all executive directors will also retire. The retirement of those at the middle management level – General Managers and deputy GMs will leave many cabins in banks looking vacant and forlorn over the next 2-3 years. Thus there is going to be a shot of “retirement exodus” of the top and middle management layer in the banking sector.

In September 2016, during a conclave meeting of SBI, RBI deputy governor S.S. Mundra had said that there is an impending leadership vacuum at major public sector banks on account of retirements of senior functionaries and said there can be driverless cars but we cannot talk about a leaderless bank. Mundra said of the 20 public sector bank chiefs, eight of them will retire in 2017, 10 in 2018 and there would be only one who would be retiring beyond the next two years.  As regards the second rung of leadership, five are retiring in 2016, seven in 2017, 10 in 2018, 12 in 2019 and the remaining three will retire in 2020.

This is scary given the state of the banks even with leadership! And all the more scarier when you recollect the amount of time it had taken last year to fill the CEO seats at Andhra Bank, Bank of Baroda, Bank of India,  Canara Bank and Punjab National Bank.

It is pertinent to bring this question up as currently there is a major debate raging about the appointment of the new army Chief where seniority was not the qualifying need. Then came the appointment of the Chief Justice of India (CJI), which is purely on seniority, with the maximum age limit being 65 years. That’s why, following the rule only of seniority, the current CJI Thakur had just about a year in office before his retirement. The newly appointed CJI will take charge from 4^th Jan 2017 and is due to retire on 27^th August, 2017, with a 45 days summer vacation also thrown in. Thus by respecting the aging and loyal, the disrespect is actually being shown to the very institution which they are supposed to serve.

The debate on Army Chief holds little water – any Army commander would have reached the cadre of General only because of his merit thus suspecting whether he deserves it or not is simply not a debate. The debate is whether he superseded those who were standing in the queue for this promotion. The Army is not about rewarding its people alone but serving and protecting the people and country first; so the one who gets promoted should be purely on merit only.

The problem in PSU banks is that though seniority is a big criteria, the bank itself does nothing to groom them. Right from the junior level, why aren’t the employees taught to take on higher responsibilities? Only my job – that’s the attitude which is carried onwards as a CEO also, which in turn explains why PSU CEOs are not really bothered about bringing in a change or becoming a legend in that way. We have a Deepak Pareikh or Naina Lal or Chanda Kochhar or KV Kamath but why PSU CEO has made a name like this? It all once again boils down to the attitude; as long as they feel, “ I don’t care what happens once I retire” there will be only chaos. Yes, the blame lay on the Trade Unions too who do not allow freedom in recruitment, placement, transfer and promotions but maybe the education needs to begin from there?

The problem is also the tenure – the CEO of a PSU bank has a tenure of three years and that is really not enough time to bring about any change or transformation. Lateral recruitment should be encouraged where private sector CEOs should become PSU bank CEOs as they will bring in a completely new perspective.

PSU banks need to urgently relook at their organization chart and have a HR in place which is best for the future of the bank. As Mr.Mundra righly said, the tenure of CEOs should be increased to five years is any Govt-define milestones are to be met.

Seniority alone should not be the norm for appointment of crucial Government institution heads or else the lack of respect for these institutions will only worsen further.

And regarding this debate about appointment of Bipin Rawat, the country – we the people, politicians, officers, commentators, all should refrain from casting aspersions on this appointment as the cascading effect it will have on the troops, juniors will be devastating, weakening the morale and in effect the entire nation!