In a move that is going to freeze promotions in public sector banks at senior levels for at least the next one year, the government has proposed to limit the number of senior executives in these banks, according to the size of their business, two bank executives familiar with the development said.
The finance ministry has said that banks should not have more than 10 general managers for business up to Rs 1.50 lakh crore, against the previous rule of 20 GMs for Rs 1 lakh crore.
It has also suggested a 1:3:9 ratio of GM, DGM and AGM in government banks. "This is the first time that the ministry has stepped into such micro manpower management of public sector banks," a bank chairman told ET, requesting anonymity.
This will create a battery of surplus manpower in senior categories and top bankers said that they may have to put a halt in promotions at senior levels. For example, Allahabad Bank will have four surplus GMs, while Punjab National Bank and UCO Bank will have eight and nine excess GMs, respectively. State Bank of India will not have to follow the proposed norm as it is guided by a separate act.
However, existing officials will be allowed to continue till retirement. According to the ministry's proposed rules, Punjab National Bank can have a maximum of 37 GMs till March 2012, while Bank of Baroda and Bank of India can have 35 and 34, respectively.
These banks will be allowed to add one GM each for every Rs 15,000 crore of incremental business. The ministry shot off a letter to all public sector bank chairmen on Wednesday and said that there is "mismatch in the number of posts in senior positions and an immediate feeder channel has taken place which is creating difficulty in proper manpower management." The ministry has directed banks to submit their views on the proposed changes in a week's time.
PSBs have been facing a severe mid-level crisis for the past three four years, following mass retirement and the move is seen as an effort to rationalise the human resources available in these banks. "A change in regulation for PSB manpower management was long required. The guidelines were last revised in 2007 and the business environment has dramatically changed since then," a general manager in a Kolkata based bank said.
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