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Proposed Inter bank Transfer and Promotions will prove killer bullet


Danendra Jain   [ ]




Public sector bankers in their forties may soon begin moving across banks as a churn mechanism to make decisions faster and take on competition from new and foreign banks. This will mean the finance ministry will have a greater say in the promotion policy of these banks. The common promotion policy for all officers will begin from the grade of assistant general managers. Currently, the ministry decides on appointments only at the level of executive directors, three levels above AGMs. In the run-up to the exercise, the finance ministry recently advised all public sector banks to halt their promotion exercise for officers eligible to become assistant general managers. The promotions will resume once the ministry comes up with a policy on promotions and inter-bank transfers.

This step of the government will have more bad results and add fuel to already burning banks
Flattery by bank officials to ministers and officials of RBI and Ministry of Finance will increase. As of now this was limited only to the post of General Manager and ED who lobbied MOF and RBI for getting quick and out of turn elevation to higher post and to get choice posting.GM and ED had to spend 25 to 50 lacs for getting the post of ED or CMD of other bank. Now even AGM and DGM will focus his attention on ministers and brokers of minister for getting promotions.

Not only this, these corrupt executives will have no more loyalty and attachment for any particular bank. They will spoil one bank and try to switch over to other bank to get rid of humiliation and punishment. Officers below Asst General Manager will also try to indulge in flattery and bribery to powerful ministers and powerful officials and brokers for getting choice bank in their home town or in home state. There will be no love and attachment for any bank in the mind of officers of any bank. Corrupt officials of banks will go on spoiling one bank after other bank.

Bad culture of flattery is already prevalent to some extent in public sector banks and it will get further boosted up by new step likely to be taken by Ministry of finance making interbank promotion and transfer a reality. Even if a government bank sinks due to bad lending, CMD of any banks has never been punished in the past forty years of bank’s nationalization for bad management, for taking bad decisions, for earning money in contractual and supply works, for bribe based recruitment and promotions and for failing to stop his junior bad executives indulging in bad lending.

Lacs and crores of rupees are spent and will more be spent by corrupt officials in extending red carpet welcome to their seniors to get favour. Costly gifts will be given to seniors to get out of turn promotion and choice posting. Public sector banks have already accumulated unmanageable and dangerous level of bad assets and this new culture will further ruin the situation and there is now doubt to me that PSBs will invite bad days, incur loss in thousands of crores of rupees as BSNL, Indian Airlines and other PSUs are incurring year after year and finally face crisis of survival giving private banks to proper by leaps and bounds. Inspite of all privileges enjoyed by public sector telecom operator or airlines or any public sector undertaking , they are incurring loss to the tune of thousands of crores of rupees whereas their counterparts in private sectors are earning profit in thousands of crores of rupees. Politicians protect and like only corrupt officers due to their own vested interest.



It is worthwhile to mention here that many CMD of banks have already spoilt public sector banks by their actions and they are still in the good book of MOF and RBI only because these corrupt CMDs are clever in data management and in the art of managing their superiors.. They indulge in and they promote bad culture not only in lending but also in recruitment, promotion and posting. ill-motivated lending to corporate, bribe based recruitment from campus in higher scales ,mischievous policy of transfer, bribe based waiver of high value loans, ill-motivated compromise with bad borrowers to reduce the quantum of Non Performing Assets like activities of top officials. They have already vitiated the culture in government banks and now new policy of interbank transfer and promotion will further add fuel to fire.



Though RBI advises banks to control NPA and restrict it to 2% of their gross advances, reality is that gross NPA percentage in thousands of branches have already crossed the level of 20 to 30 %. There are many branches in all banks where gross NPA percentage is more than 50 to 75% and still RBI think it wise to remain silent spectator. Many branches in Public sector banks have accumulated unmanageable proportion of bad assets and still our government feels pride in speaking from public platform that public sector banks are in good health and prospering more compared to private banks. Government with an intention to hide their failure in proper management , to sto exposure of their corruption and to conceal their non performance resort to infusion of capital to weak banks from time to time.


At least two out of ten Branch Managers and five out of ten credit officials are corrupt and they sanction new line of credit only after taking bribe and costly gifts. Almost every Regional Head have about ten such Branch Manager in their area of operation who blindly sanctions credit for the sake of bribe and for sharing the same with their regional heads. In this way at least 25% of branches in almost all regions have gross NPA more than 25%. These corrupt Regional Heads have built adequate capacity to motivate and buy their seniors and also to officers in Vigilance departments, CBI, HRD, MOF and RBI and this is why they are never trapped and caught even if they are corrupt from their bottom to top.


It will not be exaggeration to say that the most corrupt executive in a bank s made vigilance officer in the bank. This is why hardly ten officers out of one lac bank staff is punished for their corrupt activities whereas bitter truth is that there are hardly ten honest officers among one lac bank officers. Even though more than 75% of total advance in a branch is bad, higher management of the bank promotes Branch Manager of such Branch. Similarly a Regional Head or a Zonal Head or a Circle Head is elevated even if he or she has added assets worth tens and hundreds of crores of rupees in NPA portfolio.


Corrupt executives rather get quicker promotion and now they will get chance to move to other bank and get wider scope for accumulating wealth through ill-legal ways as officials in other government departments are getting and they will get rid of punitive actions too as hitherto corrupt officials are managing in prevalent corrupt system of administration. Munsi Prem Chand wrote long ago “when protector become damagers, none can stop destruction” When government is corrupt, when union leaders are corrupt and when investigating and action taking bodies are corrupt there is no fear in the mind of any evil doers in the banks or in any other department.




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