
The recent exits of senior officials from public sector banks (PSBs) who were hired from the private sector have sparked a debate about the relevance of lateral hiring from private banks in the banking sector. These exits have occurred at a time when Union Finance Minister Nirmala Sitharaman has emphasized the need for high-quality professionals, including those from the private sector, to help PSBs grow their business.
Lateral hiring refers to the practice of recruiting experienced professionals from outside the organization or industry to fill senior positions. In the case of PSBs, this involves hiring executives from private banks to bring in their expertise and innovative practices to improve the functioning of PSBs.
Examples of Recent Exits
Several notable exits have taken place in recent months, raising concerns about the effectiveness of lateral hiring from private banks in PSBs. For instance, Rajnish Khare, the Chief Digital Officer (CDO) of Union Bank of India, resigned from his position after just 15 months, despite having a five-year contract with the bank. Similarly, Yusuf Roopawalla, the CDO of Bank of India, resigned in January 2024.
Contrary to these silent exits, the exit of Akhil Handa, the CDO of Bank of Baroda (BoB), in November 2023 received wide publicity due to the BoB World app mishap. Handa claimed to have resigned, while the management of BoB stated that his contract was terminated along with several other staffers involved in the app mishap.
These exits, along with the reported exits of other senior officials hired from the private sector, have raised concerns about the reasons behind these departures and the challenges faced by officials hired from private banks in PSBs.
“I tried changing things but it was simply not worth it. I had to quit,” says a senior banker who was hired from the private sector by a large PSB recently.
According to sources, Roopawalla wanted to lead the digital banking operations of the bank entirely, but as he had to report to the chief general manager, he tendered his resignation citing personal reasons. Roopawalla has now returned to the private sector, serving as CIO of Unity Small Finance Bank since February 2024.
Reasons for Exits and Challenges Faced
According to sources, some of the officials who left their positions cited reasons such as the resistance faced from existing officials, the wide pay gap between private banks and PSBs, and the slow decision-making process in PSBs.
One of the challenges faced by officials hired from private banks is the wide pay gap between private banks and PSBs. The total cost-to-company for existing digital officers in PSBs, with the rank of chief general manager, is around Rs 70-75 lakh per annum, while candidates from private banks are offered upwards of Rs 1 crore for the same position. This significant pay gap can create dissatisfaction among officials hired from the private sector and may impact their motivation and commitment to the organization.
Additionally, officials from private banks may face resistance from existing officials in PSBs. Some officials believe that the resistance stems from a desire to show that private sector lateral hirings in PSBs do not work, which goes against the government’s agenda of bringing the best talent into the public sector. This resistance can hinder the smooth integration of officials from private banks into the existing organizational structure and impede the implementation of necessary changes.
Expectations and Decision-Making Process
There are high expectations for officials hired from private banks to deliver results quickly in the digital banking vertical, as PSBs are lagging behind private banks in this area. However, the decision-making process in PSBs is often slower due to the scrutiny of higher officials, while private banks provide more freedom for officials to make decisions. This disparity in decision-making processes can create frustration for officials accustomed to a faster-paced environment in private banks.
It is well accepted practice that Private sector executives cannot run a PSU for the following reasons
1. Pay difference.
2. more decision making powers
3. More of accountability for doing things which may go wrong and no much incentives or motivation for thing which have gone the right way.
4.More people who are knowledgeable is not given promotion which leads to frustration.
5.Lateral entry is not the solution for PSB banks.
6. It is observed that lateral entry had many flaws and in some cases the person who is doing well while in the same institution The person who has come from outside is on a look out from the day one . So not much of commitment for the organisation
Public sector banks officers are working under tremendous pressure and given unreachable and highly impossible targets…they can’t achieve…but the Management of the public sector Banks are putting tremendous pressure and and allotting highly impossible targets ..
Averagely every officer working daily more than 12 to 15 hours daily… OFFICIAL LEAVE CANT BE SANCTION… SUNDAYS AND SATURDAYS TO BE WORK …I am working in State Bank of India as a Dy Manager and aged 54 years but I want to quit from from service…I never recommend to young generation to join in Banking industry
I truly agree with you.. please call me as i am also facing the same issue . please call me at 9392403511 urgently as i want to seek your valuable advice.
True, I am from union bank
You have to understand the real reason as you need to have sufficient manpower to increase your business and grab opportunity.What kind of a business model PSU follows where manpower is decreasing and business is increasing ? You want 800 cc engine to give you performance of 1600 cc car. You need to increase your engine strength and not driver. Same way, you need to upgrade your infrastructure and sufficient manpower to run it effectively.
Love and affection is thing of the past. Sincerely working hard is not recognised. You follow your boss for parties, gambling etc to get promoted.
Sir many People thought only software jobs are having highest pressure, may be it’s correct, but getting good career growth, but in banking sales pressure is high, but they are not getting that much of payment.
Sir,
You had a worse experience as You are an employee of SBI like me. Yes I too experienced the poor response of the management. I’m an Ex Serviceman Banker, a single man Award staff in a Single officer Branch. The other lady staff has simply stopped coming as she didn’t get a posting in the city area. She’s an young lady and was preparing for the civil services exams, may be she won’t join back. The State Govt’s scheme to distribute 1000/ per month to all ladies married and widows, has just made the situation horrible.All ladies are coming with all old INOPERATIVE accounts
Even after repeated intimation to the HR ; getting another staff is a distant dream. Facing the angry and arrogant customers is a Hectic task.
ITS FIGHTING A WAR WITHOUT PROPER WEAPONS.
TAKE CARE OF YOUR HEALTH SIR.
Regards
ARUP KUMAR SAHA
CASH OFFICER
SBI GERWANI
RAIGARH, CHHATTISGARH
Most of the people hired laterally from private sector are arrogant and don’t try to understand the organisation, its structure and their challenges. They want to be given absolute authority and behave very badly with other bank officials. And when they fail to overcome challenges they blame it on the organisation and leave.
yes private banks are more privileged and high pay when compared with PSBs
Yes that’s true. And nowadays officers gets promotions from outside references . Promotions happens based on influence and reference and deserving candidates are deprived from getting promotion
Serving in a bank means you had committed a lot of sin in previous birth and in present life God is cursing you.
It is much more rewarding to serve as clerk in Government than aofficer in a bank.
Working in today’s world of PSB is similar to ask a sailor to sail with his/her hands and legs tied and thrown in the pool to excell in swimming. Daily working 10-11 hrs with acute shortage of Human Resources, facing public wrath as if we are the only sinners responsible for the situation, have actually becoming demotivating factors. We feel happy to serve public but are not provided with the basic needs. In fact it’s becoming harder day by day to work happily. Are only people working in the organisation are only responsible for this?
Why need for lateral entries instead give sufficient staff and pay scale according to inflation you can see wonderful results in psb’s and rrb’s
completely agree with you.
True, I am working in union bank of india, pune , here working condition is getting worst day by day, lot’s of unethical pressure is put by Regional office and zonal office for digital onboarding of customer. I am searching for new job and want to leave the bank as early as possible, specially because of zonal office staff.
Actually the positions given in PSB are not backed by experience and knowledge, quick promotions are the root cause of this plethora of issues one after another
Private bank works systematically, In PSB branch officer will do all work from sourcing of Loan ( processing it, documentation, Disbursement, post Disbursement Compliance, recovery) to till closure of Loan. when work in PSB centralized. PSB will automatically perform better than Private bank. Extreme shortage of manpower in PSB. Most of Officers are posted at controlling office (RO, ZO, BACK OFFICE, HO etc) per employee business in PSB is more than 30 Crs. But in Private bank it is just 15 crs.
Not for staff shortage but inhuman demand from higher authority to achieve various things, faulty promotion process, knowledgeable and experienced persons not getting promotion at higher posts and thus becoming frustrated, over working, deprivation of family life are the reasons why job in banking sector is hell
The banking job was very attractive till the IT companies were not around.The drastic introduction of Core banking has totally changed the work culture and severe competition among private and public sector banks. The government should create a level playing field in all parameters like targets recovery delegation of powers and decisions making process.
While an officer has to work under tremendous pressure till late hours in psb same is not with private sector banks as most of functions are outsourced making credit decision faster without accountability concerns.
Young Banking Professionals don’t want to damn fool old manager those are sticking the chair with “Senior” label are mostly even not known MS operations fully.
It may be the results of belief that foreign degree holders / foreign officials / fluent English speaking people are more intelligent and capable. It is the result of present fascination, fascism and nepotism. Failure or unwillingness to recognise the talent and capability of the eligible and deserving employees.
In PSB the top beauracrats expect that all the third party business like life insurance General Insurance card business to be done by the poor branch head giving his blood and sweat and achieve the target or else get the hit under the belt. The top officials from the level of AGM to Chairman takes the major chunk from the commission received on crossselling business. They seldom ask to do the core business and achive the target. That’s why people are frustrated and promotion is not considered on merits rather on recommendation from senior officer who only do the cross selling business only. Now there is a huge knowledge gap amongst the officers in senior and top level. From scale-III to GM level promotion are done on recommendation not on merit. That’s why PSB are getting weak in management. Ask any AGM and above officials, if he has approached any customer for cross selling business. It is a big No. They only moves the hunter on poor branch head.
Contract employees has to always hear that they are Lateral employees, as if they are from different world, they don’t have medical facilities nor pf contributions from the organization. Contract employees are not allowed to enter in any functions of bank
I am happy that I able to retire crim ECB(now UBI) with full pension on superannuation without any enquiry pending against me. That too after 38 years of of service. I am lucky to reach Scale IV( CM). The entire promotion process was fraud. To explain all I have to write a novel. No time and useless excercise. Always transfers all over India and gained lot of exposure and expertise. But I feel bank not used me fully. ECB was a good Bank. Now lost identity because of fault of some and government policy. Better to stop here😀
Congratulations on your superannuation without any enquiry pending against you. You are one of the lucky few. Not all are so lucky sir.
Banking nowadays is becoming more like slavery especially from field level officials including branch manager of any scale to scale 1 official. Frequent connectivity issue, layering of decision making process that delays each branch to be either relying on the mercy of zo, processing centres that keep on conveniently doing there chores leaving Branches to face fierce customers on one hand and demanding management. Handholding is completely missing. If any issue arises, Branches are held accountable and if any credit comes then cake cutting is done at zo…I hope many will relate
The main problem with psu bank is inefficient and biased management. Their decisions are not sinking with organisational goal rather their own choices which is based on personal comfort.
Many persons at top level don’t have basic common sense, they r giving unrealistic target and reviewing branches on the same. Daily review meeting is conducted. Even MD is reviewing directly branches. No hierarchy. No discipline. No ethics. Thousands of inefficient officers are posted in same city for more than 10 to 15 years. Others are getting frequent transfer.
Name is PSU Bker & honest. But his nature of work is reverse.The deserving promotion in PSU is just 10% &Rest by influence. A peon in Fin. Min can make a GM from the List.This is due to the Pro- policy which can be easily manipulated
PSB are Reservation based Recruitment & Promotions.
Whereas Private Sector Banks are fully merit based
Your opinion is highly condemnable. It declares that BCs , SCs and STs are not qualified and without talent. Awake, this is not 19th centuary, when you people oppressed those people. Times are changing change your outlook.
Employees get promotion on the basis of reservation and referrals. Management not declaring the mark of candidates who are appeared for promotion exam & interview.
My first question, why reservations continue after joining into banks through same reservation. It will not choose good leaders who are worked hard with knowledge.
Second question, why management not disclosed written mark and interview marks for all candidates.
Govt or management not taking proper decision on this matters, so employees chosen for promotion through caste based system not able to take decisions at the right time.
It should be the other way round.Executives from PSB’s should be put into Pvt Sector banks to stop the slavery that is going on in Pvt Sector Banks.Thesr executives have lost all their manners and hv become autocratic and treat their juniors as slaves.All of them should be taken to task for human rights violation.
Beware customers, there is no check on banks by rbi where an managers of bank feeds mobile of his or her relative , servant etc in the accounts of customer and do illegal activities the recent example is axis Bank manager of mullanpur, bank of baroda, even SBI feeds mobile no. 9999999988 with seven different unknown customers and is sitting on records to disclose this misdeed beware customers Wake up banks now are losing trust
I am working in union Bank for 27 years. Definitely in psu banks no recognition for talent. Always we have to work under fear. Fear of scolding in meetings, Fear of transfer, Fear of deciplinary action. This fear put toll on our health . If you are sincere and straightforward no body like you. Also your own colleagues after going up the ladder avoid talking to you for any help. Higher level promotion to scale 4 and above is not based on experience and talent. It’s based on recommendation. Youngsters are therefore leaving the bank. Seniors don’t have option so continuing . Earlier public sector bank concept was different. We used to serve to make betterment of life of poor in villages. Opening branches in rural etc. Now it’s become profit centre but government is controlling. Transfer policy worst. There is no such transfer of out of state in other organisation but only in psu banks. God only should save employees of psu banks.
It may not be relevant for the present day context but higher ups during my tenure in a PSB about 30 years ago is still same. Higher ups try to supervise only and do nothing. They do not take responsibility and accountability but passed on to a persons below. Promotions are given to their own people without knowing the contribution done by the persons below. Naturally the persons who take the positions laterally given the same treatment which is one of the reasons for tesignayions
last word should be resignations
Not only in banks it is also happening in department of posts also.higher ups neither take responsibility nor accountability.only targets torture to field/ operation branches.
why only psb even PSUs have the same malady. The problems
lie in no ownership.
In PSU , the lazy culture, most of the time server down etc.In pvt Banks each one has its own target to reach ,promotions are based on performance n skills are rewarded so ,.from the high tech to PSU Culture where resevation,seniority,local leaders intervention ,recommendation, prolonged leaves ,no staff on needy days and automatic DA hike, ,No fat bonus .How can u expect to bring sprint race culture here? Never! Hence they give up .
Transfer policy is worst in PSBs. The management has no humanity while transferring the staff, instead they enjoy harassing them. Even they don’t leave female staff. The Government says female staff should be posted near to the place of spouse. My own newly married daughter-in-law working in SBI as officer trying for transfer for the last more than one year to my son’s place. They are staying more than 500 Kms away. The Government instructions are only for namesake. In such instances who will continue in the Bank.
My daughter was transfer by the bank in Gujrat from punjab and she got retirement . Her request was rejected cruely by the BOB.
If the government is honestly interested to improve the services of PSBs, then recruit human resources to the sector immediately. The lateral entries from private sector banks will never understand the basic characteristics of a PSB!!that it is through the PSBs , all the government policies have been reaching to the Masses.. These laterals hired from private sector are interested only in Class Banking and forces the Mass Banking employees by implementing Sales Targets like the private sector . The government “boasts” of improving the lives of Masses, but Forgets that these services have been reached through the PSBs. Laterals hired from private sector are always “Interested In Personal Achievements”, while PSB employees are always engaged in Social achievements. This is the fundamental disparity between the two. The Govt understand this very well, but always rejects to Accept the truth..