The government-appointed high-powered committee on human resources issues in Public Sector Banks (PSBs) has recommended sweeping changes in public sector banks including Maharatna status for State Bank of India and rural stint for new hires.
The committee headed by former Bank of Baroda chairman A K Khandelwal has also suggested giving stock options, or ESOPs, to performing employees.
“We’ve recommended that 15% of the top-performing employees should be given stock options in order to arrest attrition, besides 2% of the net profit be allocated towards incentives and rewards,” said Mr Khandelwal after submitting the report to the finance ministry.
The committee has also asked that 50% of office-level recruitment should be done directly, rather than through internal promotion and it should be mandatory for clerical staff to work in rural areas for three years.
The committee has also recommended maharatna and navratna status to public sector banks based on their performance, however, it has said that State Bank of India should be conferred with Maharatna status based on its sheer size and reach.
In order to streamline the process of promotion and development, the committee has recommended appointment of an executive director level officer handling human resource division of each bank with more than Rs 3 lakh crore business and employee strength of 30,000.
“There are around 1,07,968 employees in banks who’ll retire by 2015, of which 7,736 are officers. We need to set up a comprehensive leadership management strategy so as to keep growing,” said Mr Khandelwal.
The committee has also recommended separating the post of chairman and managing director, besides enhancing the power of chairman to sanction loan over Rs 100 crore.
Major recommendations —-
- Mahartna for SBI, Navranta and miniratna status to other state-owend banks
- Stock options for top 15% employees
- Rural stints for new hires
- Separation of the post of chairman and managing director
- Setting up of Banking Leadership Development Institute (BLDI)
- 360 degree feedback for scale four employees and above
- Setting up of own wages and service conditions by each bank
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