The recommendations for the transfer policy by the Department of Financial Services (DFS) undermine the autonomy of banks, according to employees of public sector banks. The officers’ and employees’ associations argue that transfer decisions should be left to the banks’ management rather than the finance ministry.
“DFS has no locus standi to issue such micro-level circulars to banks, as transfers are internal matters governed by each bank’s policy. If the government starts dictating transfers and promotions, it undermines the autonomy of banks,” CH Venkatachalam, general secretary, All India Bank Employees Association told FE. “Such micromanagement is unwarranted and leaves no room for banks to make their own decisions,” he added.
The DFS on Tuesday issued recommendations to enhance transparency in the transfer policies of public sector banks. The department has urged banks to incorporate these recommendations into their transfer policies, subject to board approval. The new policy mandates that banks automate the transfer process, relocate women employees to nearby areas, avoid mid-year transfers, and ensure that employees are assigned to regions where their language is spoken.
“This department has observed an increasing trend in the complaints/grievances received with regard to the ‘Transfer Policy’ and its implementation by the PSBs,” said DFS in a circular. “In view of the above, the ‘Transfer Policy’ of the banks have been reviewed and with an aim to promote greater transparency, and to ensure the formulation of a uniform and non-discretionary ‘Transfer Policy’,” it added.
Further, bank officials claim that many provisions in the revised policy are already part of the banks’ existing transfer guidelines. “All these recommendations are already there in each bank in different ways. There is nothing new in DFS’ recommendation,” said a senior bank official.
According to the officials, banks have already automated the transfer process by posting vacancy-related data on portals. Additionally, banks have begun local-level recruitment to ensure that employees up to scale 3 are posted within the same state.
However, bankers argue that some of the recommendations are difficult to implement effectively. For example, mid-year transfers are unavoidable due to retirements happening throughout the year, which require immediate filling of vacancies to maintain operational continuity. Additionally, a significant proportion of officers from specific ‘circles’ are often dispersed across various regions. Concentrating these officers in their home regions could disrupt the operational balance. Similarly, transferring all female employees to nearby areas is not feasible, given the steadily increasing proportion of women in the banking workforce.
“There cannot be a single uniform policy for all public sector banks. The transfer policy should be decided by the respective boards. Banks operating in different regions face unique transfer-related challenges, and the boards of these banks are better equipped to address them,” said a senior official of a public sector bank.