Tag: psu

Finance ministry advises PSU banks to hold promotions, transfers, BFSI News, ET BFSI

Banking & Finance

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The annual promotions and transfers at banks that kick off in April will have to wait.

Due to the Covid pandemic, the finance ministry has asked public sector banks (PSBs) to consider postponing the annual exercise of promoting and transferring their employees.

The Department of Financial Services (DFS) in an advisory has asked all public sector financial intermediaries to take cognisance of the prevailing Covid-19 pandemic situation and take appropriate steps to ensure that the promotion process factors in the constraints likely to be faced by their officers and staff.

Rising hospitalisations

It said the promotion process has coincided with a spike in Covid-19 cases across the country along with localised lockdowns and an increase in micro-containment zones. As there are cases of bank employees or their family members being hospitalised due to Covid-19, bank, insurance companies and financial institutions must take cognizance of the issue, it said.

Promotions and transfers take place in the summer months just before schools open for the new academic session.

The situation was similar last year too, and the staff transferred joined new positions only after the Covid situation eased. While banks have completed the promotion process, they have kept transfers on hold.

Unions want restrictions

With Cpvid cases surging across the country, bank unions have requested industry body IBA for restriction in services and reduction in public dealing time to around 3 hours per day till the situation improves to protect bank employees from the coronavirus infection.

The United Forum of Bank Unions (UFBU), an umbrella body of nine unions, in a representation to Indian Banks’ Association (IBA) said branches with continued footfalls and across-the-counter connect with customers are potential hubs of infections. ‘We are deeply distressed to constantly receive news about infections, hospitalizations and deaths of bank employees round the clock every day,’ it said.

In the light of the grim situation, this is an urgent appeal on behalf of the entire banking fraternity to take up the issue immediately, it said.

The unions have demanded the restriction of services only to basic, essential banking till improvement of the situation and realignment of banking hours to 3-4 hours a day.

Cluster banking

UFBU also made a case for the introduction of cluster or hub banking, identifying few branches of each bank in each locality so as to enable bank employees to work on rotation.

‘We are sure that the above measures will reduce the exposure faced by employees and break the chain of infections to a great extent.

‘We are continuously getting information from the grass-root level about the non-availability of beds/ infrastructure in hospital, dearth of life-saving drugs, oxygen which has triggered panic across the nation,’ it said.



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Budget plan to privatise two PSBs: Centre may have to tweak the ‘nationalisation’ laws

Banking & Finance

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The Centre may have to amend at least two banking laws to take forward its Budget announcement of privatisation of two public sector lenders.

While the Centre is yet to decide on the two public sector banks it will privatise in 2021-22, multiple sources said it is clear that the government will have to bring changes to what are popularly known as bank nationalisation laws — the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980.

Although the Finance Minister had said the legislative changes will happen in the ongoing Budget session itself, indications are that the amendments will be brought only in the monsoon session of Parliament given the crowded legislative agenda for the second part of the Budget session beginning March 8 and ending on April 8.

It may be recalled that Finance Minister Nirmala Sitharaman had in her recent Budget speech said: “Other than IDBI Bank, we propose to take up the privatisation of two public sector banks and one general insurance company in the year 2021-22.”

Financial Services Secretary Debasish Panda had recently said that any of the 12 public sector banks could qualify for privatisation. He had said the names would be decided based on a three-committee-level process involving the NITI Aayog, the Core Group of Secretaries and the alternative mechanism for final approval.

Panda expressed confidence that banks that are now under the RBI’s prompt corrective action (PCA) framework would come out of it by March and be considered for privatisation.

‘Nil info’ on banks to be privatised

Meanwhile, the NITI Aayog, in a response (seen by BusinessLine) to a Right to Information (RTI) request (made on February 2), said (on February 15) that it had “nil information” on the banks that are to be privatised per the Budget proposal. Also, the government think-tank made it clear that its recommendations on Central Public Sector Enterprises (CPSEs) do not include any public sector bank. This was in response to a query on what the recommendations of the NITI Aayog are for privatisation of public sector banks and which two banks have been recommended for privatisation.

To another question, the NITI Aayog made it clear that the Cabinet has not yet approved any specific policy on privatisation of public sector banks. Any policy matter with respect to public sector banks is dealt by the Department of Financial Services, it said.

In her recent Budget speech, the Finance Minister had said that she was asking the NITI Aayog to work out the next list of central public sector entities that would be taken up for strategic disinvestment.

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