At a time when the government is trying a complete makeover of PSU banks by trying to attract private sector talent for the top slots in at least 5 banks—Bank of Baroda, Canara Bank, Punjab National Bank, IDBI and Bank of India—it has a great opportunity to take this even further. As FE reported yesterday, nearly 4 lakh mid- to senior-level personnel in PSU banks will be retiring in the next four years. None of this comes as a surprise since, way back in 2010, the Khandelwal Committee on HR issues in PSU banks had estimated that 80% of general managers, 65% of deputy general managers and 58% of assistant general managers would retire by 2015. In other words, if the selection process is right, the government can completely transform the PSU culture of banks. In any case, there is no option but to do this since, with not enough recruitment of staff through the probationary-officer route for decades, PSU banks do not have enough staff to man these posts anyway.
So far, PSU banks have not been able to attract top private sector talent for a variety of reasons, from the level of compensation to the time it takes to advance to the top. While raising salary levels, including the variable pay linked to performance goals, is critical, there are other ways to attract private talent. Around 40 applications have been received for the top jobs in 5 PSU banks because, with just so many top jobs available in the private sector, several senior private sector bank executives find it more attractive to head a mid-sized PSU—their loan books are generally much larger than those of private sector banks and imagine what it does for your CV to have turned around a bank. In the same way, mid-level private sector employees can be lured with the prospect of working in larger cities/branches and with the potential to move up a few notches in the bank’s hierarchy as well. This is a golden opportunity for PSU banks.
