PSBs Demand Relaxation In Management-level Hiring Norms
State-run banks are urging the government to relax the cap that restricts them from hiring more people for middle and senior-level management positions, citing the potential for increased efficiency.
The government has imposed limits on the number of assistant general managers, general managers, and chief general managers that a state-run bank can have, based on the size of their business. For instance, a bank with an annual business size of 1.6 lakh crore can have a maximum of 12 general managers.
Lenders argue that the consolidation in the banking industry has created a demand for more mid-level personnel.
An executive from a bank, knowledgeable about the situation, mentioned that they have discussed with the government the need to make public sector banks (PSBs) more efficient and effective, considering growth opportunities and strong competition from private sector peers. They believe there are ample reasons to relax these guidelines, which have been in place since 2016.
According to the executive, the latest round of discussions on this issue occurred last month. The executive requested anonymity.
After the merger of ten nationalised banks in 2019, creating four large lenders, the government allowed banks with a turnover of Rs 10 lakh crore and more to create a new post of chief general manager (CGM). The government stated that the CGM would act as a functional and administrative layer between the existing levels of executive director and general manager.
As per government guidelines, there can be one CGM for every four general managers in the bank.
Banks argue that bank boards should be allowed to decide on the number of posts based on their business needs. Another executive from a nationalised bank stated that the existing ratio of GM/DGM/AGM is 1:3:9, based on a 2016 position, and needs reconsideration for better functional control. This would also help in preventing attrition, he added.
