Last year, the Government of India introduced a new PLI scheme for senior executives of public sector banks. Since then, there has been chaos in the entire banking industry. AIBOC had filed a case in the Delhi High Court, and the case is still under consideration. But recently, Punjab & Sind Bank credited PLI to senior executives as per the new PLI scheme, and this is just like adding salt to the wound.
But why is there so much hue and cry about the new PLI Scheme? Let’s understand this in the article.
The new PLI scheme offers almost double to senior executives. If the basic pay of a senior executive is Rs. 10 lakh, then the senior executive will get Rs. 10 lakh as PLI, whereas officers from Scale 1 to Scale 3 will get PLI of up to Rs. 50,000 only. This is a huge difference, and most of the work in banks is done by Scale 1 to 3 officers only. Scale 4 and above officers are posted in controlling offices.
So, employees want PLI to be paid to Scale 1 to Scale 3 officers also, and PLI should be paid proportionately. But what are the real concerns of the new PLI scheme? Let’s understand.
The Fear of Privatisation
There is a fear that the new PLI scheme will lead to the privatisation of public sector banks. This fear is somewhat genuine. The Government had earlier announced plans to keep only 4 banks under government control and privatise all banks. The government is not getting adequate investment, and thus it is not able to sell banks. Even the government is facing difficulty in selling a stake in IDBI Bank.
So, the Government is planning to hire candidates from the private sector in PSU Banks. The salary in PSU Banks is low in comparison to private banks. Thus, candidates from the private sector don’t join PSU banks. At present, SBI and BOB are hiring candidates aggressively from the private sector and paying them salaries of crores of rupees, whereas regular employees get only salaries of Rs. 10 or 20 lakh. Even the salary of the SBI MD & CEO is ₹40 lakh to ₹43 lakh, whereas the HDFC Bank CEO received a salary of ₹15.13 crore for FY 2026. This shows that the salaries of top executives of public sector banks are very low.
But public sector organisations are meant to pay a decent salary and work for the welfare of the public, and employees are also not demanding an increase in salary. Then why the government is putting pressure to implement the new PLI scheme remains a big question. If private sector candidates join the PSU banks, it will automatically end the public sector character of the organisation.
The Fear of Pressure
The second most important point is that pressure will increase a lot in PSU bank jobs. Right now also, the banks have introduced a points system for the promotion of candidates. Employees are given marks as per their performance, and these marks are counted in their promotions. For example, if the KYC updation is pending in a branch, then the marks of employees, including the branch head, will be cut. If the renewal of the loan CC limit is pending, then marks will also be cut.
Due to this, there is pressure on employees to perform better. But the staff is not increasing in branches. Employees are forced to sit late in branches, which is bad for your health. In the case of PLI also, this marks system will continue. Employees having good scores will get PLI, and employees at the bottom will get nothing. Employees will be paid as per brackets.
Employees having the highest marks will get maximum PLI. Employees having moderate marks will get less PLI, and employees having poor marks will not get PLI. So, this PLI will subsequently increase pressure on junior employees. The top management will force employees to complete work anyhow so that they can get PLI. The top management will not think about whether the branch has staff or not, or whether the working conditions are good or not. This will lead to a toxic work culture, and unions might not be able to stop this as this will happen on a large scale.
Discrimination
One important issue in the new PLI scheme is discrimination. The new PLI scheme discriminates among the officers. Officers from Scale 1 to Scale 3 get PLI of only up to Rs. 50,000, but officers from Scale IV to Scale VII get PLI starting from Rs. 7 lakh. All the employees work together to achieve profits for banks. Most of the branch heads are Scale III, and this new PLI should have also been provided to these Scale III, Scale II and Scale I officers as they are the real workers in the field. Normally, in a bank branch, Scale 1 is involved in operations/routine work.
Scale II is involved in loan work or works as a branch head in small branches. Scale III works as a branch head in large branches. Scale IV works as a branch head in extra-large branches, which are only 4-5 in a city in big banks such as SBI, PNB and BOB. In small banks such as Punjab & Sind Bank, there are almost no Scale IV branches. Officers from Scale IV are posted mainly in controlling offices such as Circle Office/Regional Office, Zonal Office and Head Office. So, this is the main issue. The field functionaries – the staff in the field – should have been provided PLI proportionately.
Financial Burden on Banks
Public Sector Banks were created for the welfare of the public, and nobody in government organisations demands a very high salary. Right now, the salary of a Scale IV officer is around Rs. 2 lakh monthly. The salary of a DGM is around Rs. 3 lakh monthly. Moreover, a DGM gets a lease of around Rs. 1 lakh in Delhi. The amount is much higher in SBI. So, the salary is decent and increases a lot as we move upwards towards the post.
If PLI of lakhs of rupees is paid to these senior officers, then it might lead to a financial burden on banks. If we consider only 5% of total officers as top executives, the number comes to 20,000. If we consider the average PLI as Rs. 5 lakh only, then the total amount comes to ₹1,000 crore. This is a very huge amount. This amount could have been used for hiring more staff, improving infrastructure, etc.
The Government of India must look into this and modify the PLI scheme accordingly for the benefit of all.
