An association of public sector bank (PSBs) officers has raised objections to the revised performance-linked incentive (PLI) scheme for senior executives, arguing that it excludes over 90% of lower-scale officers. According to sources, the All India Bank Officers’ Confederation has sent a letter to the Department of Financial Services (DFS), urging the inclusion of lower-rung officers in the scheme.
The current PLI scheme covers only Grade 4 and above officials, excluding those in Grades 1 to 3. Of the 375,000 officers employed in PSBs, approximately 300,000 are in Grades 1 to 3. The association said grassroots-level officers play an indispensable role in operational efficiency and customer service, which are foundational to the performance of PSBs.
“Excluding lower-scale officers from the PLI scheme undermines their contributions, creating a perception of inequality and discrimination,” said the letter sent to the DFS. “Ignoring their contributions in the incentive structure risks diminishing their motivation and productivity, which could adversely impact the overall bank performance,” it added.
The finance ministry on Wednesday released the details of the revised performance-linked incentive scheme for whole time directors and senior executives of PSBs. The circular said the eligibility of banks for the scheme will be assessed by a government-appointed committee on the basis of four parameters, including positive return on assets (RoA) and lower net non-performing assets (NNPAs).
Bank employees said officers in the lower scales, particularly those in middle management grades (scales 1 to 3), are responsible for business generation, regulatory compliance and customer relationship management. Senior executives, on the other hand, primarily focus on supervisory and strategic tasks.
“The proposed PLI scheme disproportionately rewards supervisory roles, disregarding the efforts and sacrifices of lower-scale officers who execute critical operations and face the brunt of peer competition and regulatory demands,” said an official. “Such guidelines risk demoralising a significant segment of the workforce, further exacerbating the existing challenges of maintaining work-life balance for these officers.”
The All India Bank Officers’ Confederation has urged the DFS to extend the PLI scheme to officers across all scales, ensuring equitable recognition of contributions. The significant financial burden of the current PLI scheme for senior executives could strain bank profitability, which might otherwise be better utilised in augmenting recruitment efforts to foster long-term growth and sustainability, said an official.
As per the circular, the PLI for executive directors and managing directors (MDs) of nationalised banks and DMDs, MDs and chairman of SBI could be up to 100% of annual basic pay.
