22 govt bank staff redundant 8212; Study

NEW DELHI, OCT 10: Nearly a quarter of bank employees in public sector banks including State Bank of India SBI are redundant, a chamber...

NEW DELHI, OCT 10: Nearly a quarter of bank employees in public sector banks including State Bank of India SBI are redundant, a chamber study has said. The study by Federation of Indian Chambers of Commerce and Industry FICCI said there are about 1,77,405 redundant employees accounting for 22 per cent of total staff in 16 nationalised banks if one takes the benchmark of Rs 125 lakh BPE business per employee in 1998-99.

The figure of redundant employees would become lesser at 7.46 per cent in 20 banks if the benchmarking is reduced to Rs 100 lakh BPE, the study staff contributions to nationalised banks8217; said. Stating that banking sector should get rid of its excess staff, the report said SBI needs to reduce staff strength by 15,205 in order to achieve a BPE ratio of Rs 100 lakh and 57,978 employees to attain Rs 125 lakh BPE.

It said Rs 125 lakh BPE in 1998-99 was not a stiff benchmark as Bank of Baroda, Corporation Bank, Dena Bank and Oriental Bank of Commerce had achieved that level then. Out ofthe 20 nationalised banks studied by FICCI, as many as eight nationalised banks have shown BPE ratio of Rs 100 lakh.

These are Canara Bank, Punjab and Sindh Bank, Indian Overseas Bank and Union Bank of India, in addition to four banks under Rs 125 lakh BPE scale.

The FICCI study found that there has been no significant reduction in the operating cost to total assets and payment to employees have gone up by more than 15 per cent in several banks over the last few years.

These are indicative of structural imbalances caused by high expenses on employees. The seriousness of the problem of over-staffing can be gauged by a comparison of the per employee profit of the nationalised banks vis-a-vis the new private sector banks and foreign banks, the study said.

The banks which have shown higher profit per employee during 1998-99 was Corporation Bank Rs 1.89 lakh, Oriental Bank of Commerce Rs 1.60 lakh, Dena Bank Rs 0.76 lakh, Allahabad Bank Rs 0.60 lakh, Bank of Baroda Rs 0.95 lakh, Andhra Bank Rs0.69 lakh, Punjab National Bank Rs 0.57 lakh, and union Bank of India Rs 0.59 lakh.

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The profit conditions of three nationalised banks are at a precarious condition, it said adding two of these namely UCO Bank and Indian Bank have incurred losses in the year ending March 31, 1999 and the third bank United Bank of India has earned a meagre profit of Rs 7000 profit per employee.

.Even the SBI has not fared well in terms of profit per employee with the bank seeing a sharp drop in profit per employee from Rs 77,000 in 1997-98 to Rs 43,000 in 1998-99, it said. Among old private sector banks, Kerala-based Federal Bank did not perform well in terms of profit per staff.