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Gurgaon Branch was a branch of a leading public sector bank in India. Though the bank was financially sound, there seemed to be a leadership crisis in this branch. The aggregate deposit had been consistently falling over the past three years. The branch had not been able to disburse fresh advances or recover outstanding advances. Moreover, the employees were unhappy with both the branch head and the accountant. This case is concerned with transforming the culture of a public sector bank's branch that has been plagued with officers-staff conflict, inter-union rivalry and bureaucratic culture and consequently, poor financial performance, weak customer orientation and poor customers' satisfaction. This case provides a useful basis for discussing the issues and challenges involved in the process of transforming highly politicized culture to a desirable team-oriented customer-centric performing culture.
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The case was prepared by
Abinash Panda, Assistant
Professor in Organizational
Behavior Area, Xavier Labour
Relations Institute (XLRI),
Rajen K. Gupta, and Satish
K. Kalra, both Professors in
Human Behavior and Orga-
nizational Development area
at Management Development
Institute, Gurgaon, India as
a basis for class discussion
rather than to illustrate either
effective or ineffective han-
dling of an administrative or
business situation.
Please address all correspon-
dence to any of the three
authors: Abinash Panda,
Assistant Professor, Orga-
nizational Behaviour Area,
Xavier Labour Research
Institute (XLRI), Jamshed-
pur, India, 831 001, E-mail:, Rajen K.
Gupta and Satish K. Kalra,
Professors, Human Behav-
iour and Organizational
Development Area, Manage-
ment Development Institute,
Gurgaon, India, 122 001,
© 2006 by World Scientific Publishing Co.
Gurgaon Branch*,a
The quarterly report of the second quarter of 2003 was
out. Dr. Alok Verma, the Senior Branch Manager (SBM)
of Gurgaon branch of a nationalized bank, was a worried
person while he was glancing through the financial
statement. The Regional Office in Delhi was concerned
about the negative growth of the only branch of the bank in
Gurgaon over the past three years. The aggregate deposits
had been consistently falling at the rate of 10% though these
were growing at the pace of 35 and 32% in the region and
the bank nationally during the same period.
The growth in the amount of loans sanctioned during
this period was also not significant. Loan recovery had
been abysmally negligible. Poor recovery of loans was
contributing to non-performing assets of the branch as well
as the bank. The Net Non Performing Assets (NNPA) in
the branch was 4.2% of the assets compared to the bank’s
2.2%. Many of the customers, who seemed to be loyal to the
branch, had closed their accounts in the branch and migrated
to other new private banks, which had opened branches in
the same locality. The Regional Manager had asked Alok to
visit the Regional office to explain what ails the branch.
*Abinash Panda, the first author is thankful to Prof. L. Gurunathan of XLRI for his
insightful comments in the earlier drafts of the case.
aThis case is based on data collected through observation, interviews with, formal
and informal discussions with the employees of the branch. The observation data has
been presented in the form of field notes.
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Alok thought that the zonal head and the regional
head were to be blamed for the poor performance of the
branch. The bank did not have a single Automated Teller
Machine (ATM) in the locality. The access to the branch was
clogged with high traffic, as the market had grown very fast
in the past two to three years. The bureaucratic nature of
the functioning in the bank did not give enough autonomy
to the branch head to decide on advance disbursal. New
private banks like ICICI were less bureaucratic and required
less paperwork for loan disbursal. Moreover, to mobilize
deposits these banks had hired sales agents who go from
door to door to sell the bank’s products. Moreover, he felt
that customers were no longer loyal to a particular bank.
They were migrating to banks where they could get loans
with minimal paperwork and in less time. Private sector
banks were more efficient on that count. Private banks and
many of the branches of other nationalized banks were
also offering services through internet-enabled and wireless
channels like on-line banking, mobile banking, etc.
Even branches of this bank in the adjacent city of
Delhi were offering on-line banking and mobile banking.
Educated customers usually preferred on-line or net
banking. An internal survey had indicated that 76% of the
customers who had closed their accounts in this branch
belonged to the salaried class and 68% of them had opened
new accounts in ICICI and other private banks which had
ATMs in this locality and also offered on-line banking. He
felt that the poor performance of the branch was primarily
due to inadequate infrastructure compared to other branches
in the locality.
He was also worried about the poor disbursal of
advances from the branch. He could not blame the Manager
(Advances) for poor disbursal of loans as no one wanted
to be booked by Central Vigilance Commission or Central
Bureau of Investigation.b It would affect their career growth
bCentral Vigilance Commission has recently developed a Vigilance Manual on the
basis of which the commission investigates if the bank employees are following the
banking norms. CVC has also created an Advisory Board on Bank Frauds to look into
frauds in banking transactions.
If an advance is not recovered the Manager (Advance) is held personally responsible
and booked under these provisions. CVC investigates if there is any violation of
banking norms while disbursing loans.
00076.indd 104 6/1/2006 6:41:06 PM
in the bank. Alok was feeling helpless and confused. He had
called a meeting with the two most senior managers of the
branch. They were Jay, the accountant, who looks into the
operational and personnel aspects of the branch, and Ashok,
the Senior Manager (Advances) who is responsible for
advance disbursal and recovery. (See Annex A to understand
the Indian Financial System, deregulation and reforms, and
competition in the banking sector. See Glossary in Annex C
for a brief description of various technical terms.)
This Bank had its inception in the first quarter of the last
century in one of the princely states of India. This bank
achieved the status of a scheduled bank in 1935 when
Reserve Bank of India brought all the banks with a paid up
capital of 0.5 million rupees or more, under its fold. Later
the bank was nationalized in 1969.
Nationalization of banks meant that the banks became
financial vehicles facilitating the government’s plans for
development. Lending was directed at certain sectors
for instance, agriculture as well as small and medium
scale entrepreneurs. The competition then was focused
on deposits. Banks were ranked based on the amount of
deposits they held.
Personal loans were disbursed either through
institutions or with security such as jewellery. There was
practically no competition among the banks as the interest
rates used to be fixed by RBI. Moreover, there was not
enough focus on recovering advances especially those
given under the government schemes for which the money
disbursed was refinanced by the government.
Liberalization brought about competition from foreign
banks and with it information technology, which made
banking easier for customers. Customers who belonged to
the upper middle class switched to foreign banks, as they
offered much better customer service and better ambience
(albeit at a higher cost). Banks became more concerned about
their profits as a whole compared to just deposits. Profit
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targets at branch, region and zone level were introduced.
The branch head, regional head and zonal head were made
responsible for the profitability of branch, region and zone,
respectively. The luxury of nationalization which ensured
that the government will be a guarantor was no longer
available. Non-interest income became a critical contributor
to the revenue of the branch, and hence, its performance.
Branches attempted to become customer centric and service
The Bank focused on introducing innovative products
both in the retail sector and in the commercial sector. It
diversified into areas of merchant banking, housing finance,
credit cards and mutual funds in the growing segments.
The Information Technology revolution in India
encouraged many banks to leverage the technology to
meet customers’ expectations. The Bank revamped its
manual system to a computerized system by automating
various processes and systems. Starting with ledgers, to
ledger posting machines, through ALPMs (Automated
Ledger Posting Machines), the bank graduated to the use of
mainframes based on UNIX operating systems and finally to
client server based Total Branch Mechanization Systems. The
bank has 1918 computerized branches out of a total of 2800
branches, which includes 40 overseas branches.
There were around 500 branches each in the metro,
urban and semi-urban locations in India. The rural areas
have the major share in the branch network which is around
1200. There are 13 zonal and 43 regional offices of the bank
in India.
There is a limited number of ATMs operating in
many urban locations. Recently, the bank has introduced
internet and mobile banking, which has limited presence.
The electronic services are operational in about 350 branches
across India. There are around 150 ATMs of the bank
scattered across India. Moreover, the bank has already
secured the ISO 9001:2000 certification for 273 branches.
(See Annex B for a brief overview of the Bank its
structure of reporting, relevant human resources policies, its
products and services and key performance indicators.)
00076.indd 106 6/1/2006 6:41:06 PM
The branch boasted of aggregate deposits exceeding 240
million rupees (Savings Bank Deposits of 180 million,
Current Account Deposits of 20 million and Term Deposits
of 40 million) with approximately 18,000 savings bank and
600 current accounts in October 2003.
Customer Base
Most customers were rustic and illiterate inhabitants of
nearby villages. Ms. Rakhi, a clerical staff handling the
Savings counter mentioned that, “Approximately 60% of the
customers have not passed the matriculationc examination.
They do not even know how to fill a form. They do not have
much expectation from us.”
Most of the customers had fixed deposits of money
which they made by selling their ancestral landed properties
to real estate builders as well as local urban development
authority during a phase when real estate and property
business had been booming.
Manpower and Reporting Structure in the Branch
There were 28 employees, which included seven managerial
executives, 14 clerical and five subordinate staff besides the
SBM. The branch’s formal reporting structure is presented in
Figure 1.
Infrastructure in the Branch
The branch presented a very shabby look compared to
centrally air-conditioned and nicely decorated branches of
cEquivalent to Class 10 examination
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the private banks and some of the public sector banks in the
locality, when the case writers visited the branch for the first
The moment we entered the branch we found
the ‘May I help you’ counterd manned by an old
employee. On the left side of the entry door, we
found SBM sitting inside a glass cabin with both
doors wide open. One door opens into the sitting
area of the employees of the branch, whereas the
other opens into the entry-cum-exit door of the
branch. There was no security guard. Anyone can
enter into the branch without any problem. It was
hot and humid. We found a water cooler on the
right side of the entry door. One of us wanted to
have a glass of chilled water before meeting the
Senior Branch Manager. When he opened the tap of
the water cooler, hot water flowed into his glass. We
Figure 1. Formal Reporting Structure in the Branch
dWith the acceptance of the recommendations by the Narashimham
Committee I, ‘May I help you’ counter has become a mandatory feature of any
branch with more than 30 employees. The branch used to have more than 30
employees before Voluntary Retirement Scheme was introduced. The counter still
exists even though the number of employees is less than 30.
Senior Branch Manager
Scale III
Scale III
Senior Manager
Scale III
Scale II
Scale II
Scale II
SB Accounts
Scale I
Scale I
Scale II
Pool of Clerical and Subordinate Staffs
00076.indd 108 6/1/2006 6:41:07 PM
realized the cooler was not working, although the
generator was on.
We also found electrical cables hanging here
and there. Tables were not properly arranged. There
were fifteen mouldy chairs in front of counters. Most
of them were in damaged condition. The customers
waiting at the counters were sweating. They were
visibly restless, while wiping their faces again and
again with their handkerchiefs. Many of them were
requesting bank employees to fill up forms. They
were directly coming into the sitting area of the
staff, instead of going to the counters to get their
forms filled. (Field Notes)
The branch was only partially computerized. There was an
automatic ledger posting machine (ALPM). The computer
operators used to enter vouchers into a database. The ledger
posting process was computerized. At the end of the day,
the accountant would take a printout of the ledger and got
it signed by the Senior Branch Manager.
General Nature of Work Culture in the Branch
The head of the service branch had the overall responsibility
of the branch performance, business development (primarily
through deposits mobilization and expanding customer
base) and sanctioning P/L voucherse, whereas the next
senior most employee, who was designated as accountant,
had been responsible for staff management, allocation of
duties to staff on a daily basis, maintenance of premises,
maintaining attendance register, and other operational
aspects of the branch including maintaining dispatch
register. The SBM along with Senior Manager (Advance)
was primarily responsible for advance disbursal and
eP/L vouchers are vouchers related to the administrative and other expenses incurred
while performing the day to day activities. The Branch Head is the only authorized
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Unionized Employees, Inter-Union Rivalry and
Officer-Staff Conflict
The clerical and sub staff employees were members of
either of two powerful employees’ unions. There were two
employees who were the branch representatives of both the
unions, who were not on talking terms. Inter-union rivalry
was manifested in various ways. The Accountant used to
have a tough time in managing them. All the employees
belonging to managerial grades (Scale I onwards) were
members of the Officers’ Association. Besides inter-union
rivalry, there was conflicting relationship between the
employees belonging to managerial grade and those in
clerical and subordinate grades.
Many of the officers felt that managing undisciplined
staff had been the toughest task. Bhuvan, an officer in the
branch mentioned that
Tackling the staff in this branch is the biggest
challenge. They are not disciplined. They come
late to the office and go back home early. They
go on leave as and when they want. They do not
have specific job responsibilities. Work is assigned
on a daily basis. Confidential Character Report is
not applicable to them. In true sense, they are
managing us.
Alok also felt that the clerical staff were at the root of all
evils in the branch. He mentioned that
Most of the problems in this branch are because of
staff indiscipline. The mindset of the older clerical
staff needs to be changed. They should be forced to
take VRS in order to enhance the performance of the
Both officers and clerical staff admitted that there was a lack
of cooperation between them. However, they blamed each
other for the lack of cooperation among them. As Rita, a
lady clerk mentioned
Officers do not cooperate though clerical staff
cooperate. In order to harass us, the officers give
00076.indd 110 6/1/2006 6:41:07 PM
difficult responsibilities, such as cash counter,
clearing, or savings to us. This is not fair. We are
overloaded with works. There is no cooperation
from officers. They are always ready to find faults in
our work. We do not get overtime if we stay beyond
office hours. Moreover, officers do not ask us for
Mohan, a clerk at one of the counters, however, felt that the
problems between the officers and clerks had their roots
in differential social status, financial benefits and lack of
decision making power.
The officers have social status, are financially
comfortable, and have decision-making powers. We
do not have decision making power. We engage the
help of trade union to negotiate for our rights with
the management.
Kedar, an officer in the branch mentioned the need for
cooperation and coordination among the employees, which
he believed to be the prerequisite to improve the profitability
of the branch.
Many of the employees in the branch also admitted
that the conflicting relationship between the officers and
the clerical and the trade union rivalry has been the hotbed
for organizational politics manifested in the form of back-
biting and gossipping. Gossipping had sometimes led to
unintended consequences.
For instance, Jaggu, a retired employee of this
branch in an informal discussion with the inspection team
mentioned how Prabal, another employee (who was still
working in the branch) manipulated his promotion (from
Peon to Clerk) by producing matriculation certificate
obtained through a teacher in Himachal Pradesh (a state
in the northern part of India) without appearing for the
examination. When the Bank’s inspection team initiated
verification of Prabal’s certificate, they found the allegation
true. Prabal was demoted from Clerk to Peon. Prabal then
filed a legal suit against the bank and mentioned how three
other employees had used the same channel to obtain their
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matriculation certificates. As a result, all the other three
employees were also demoted.
Ballu, a peon in the branch mentioned how he had
been a victim of inter-union rivalry and gossipping.
I, along with three other employees (including
Prabal) approached a teacher in Himachal Pradesh
who assured us a matriculation certificate if we take
his guidance and appear during the examination.
They all obtained matriculation certificate in 1985
from Himachal Pradesh Board. On that basis we
all were promoted from peon to clerk. I belong to
union B. I had a fight with Prabal, who belongs to
union A. When Jaggu mentioned his case to the
inspection team, Prabal also mentioned our names
to the members of the inspection team from the
regional office. We all were demoted. It was a breach
of trust.
Employees used to join in or migrate between either of the
two employees’ unions to protect themselves from what
they called the whimsical attitudes of the management and
the officers in the branch. Either of these unions, the clerical
staff argued, provided them a podium for demanding justice
from and protecting their interests.
I joined this branch as a clerical staff in the year 1999.
I had a great urge to learn new things. I used to stay
late into the night until 11 pm. Computerization of
this branch was going on then. Whenever computer
operators used to face computer related problems,
I helped them. A particular computer operator
was not up-to-date in entering daily vouchers. I
used to enter the backlog vouchers everyday after
banking hours. When it became a regular feature
and I felt that the computer operator was using me,
I protested. The computer operators get monthly
allowance of Rs. 1000. Why should I do their work
without any allowances and appreciation? There
was a big fight between computer operators and
clerical staff. The Branch Manager supported them.
00076.indd 112 6/1/2006 6:41:07 PM
Our trade union kept mum. Out of disgust, I, along
with some other clerical staff, quit from union B and
joined union A. (Atal, Clerical Staff)
I was a member of union A. The Cashier belongs
to union A. Once I requested him to change a soiled
currency of Rs. 500. He refused. What is the point
of being a member of a union where other union
members do not help you? I quit union A and
along with another four employees joined union B.
(Sandhu, Clerical Staff )
Lack of Customer Orientation
Jay complained that clerical staff were insensitive to
customer needs. They did not like to handle customer
complaints. All customer complaints used to be forwarded
to the accountant. Jay added that
Counter staff always passes the buck to me. All
customers with problems are referred to me. You
can see what I have been doing since morning.
Handling customers! One can not trust any other
staff. It is better one should do the work himself.
Jay remained busy with routine tasks like manually updating
the passbooks of customers most of the time during the day
as the printer placed on the savings bank counter was not
working and the clerk was sending all the customers to the
accountant for manual updating.
The printer placed in the savings bank counter
had not been working for the past several days.
Customers’ passbooks needed to be updated. As
the printer had not been working, it was to be
done manually. The special assistant, who handled
the savings account counter, instead of updating
them manually was sending all the customers to
the accountant, who was busy updating all the
passbooks manually. (Field Notes)
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Jay seemed to be frustrated with such attitude of the
clerical staff and he mentioned that “clerical staff should
be controlled with an iron fist. If you allow them to have
their way, they would take you for a ride.” Such an
approach of handling employees, however, was not viewed
positively. Employees were finding Jay to be insensitive and
Jay admitted that he was having a tough time in
managing the clerical staff in the branch. Employees,
particularly the clerical staff, frequently remain absent
without prior notice.
On a particular day four of the clerical staff did not
turn up in the office without any prior leave. Jay assigned
four other clerks to various unattended desks. It was already
10:15 am. Customers were waiting at the counters. A typist-
cum-clerk was assigned to the cash counter of the extension
wing. Some of the comments of these four annoyed clerks
“It seems a crime to come to the office on time.”
“Why should you not give us an allowance f? Why
should you allow a typist-cum-clerk to handle
“Why does the SBM not take action against the
employees who have remained absent without
notice?’ (Field Notes)
The work environment seemed to be highly bureaucratic.
Employees were bound to show respect for hierarchy based
on the formal reporting structure in the branch. The SBM
had to seek the approval of the regional and/or zonal office
for capital expenditure.
The SBM expressed his helplessness in solving the
infrastructure problems. He added that a branch manager
fA cashier is entitled to monthly allowance, which is not given to a clerk who handles
the cash counter on a temporary basis.
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could not do much without the support of the regional/
zonal office. “The zonal office should be supportive and the
regional manager must be taken into confidence.”
He also mentioned that
Infrastructural problems in the branch are not
getting solved because I do not have any power to
do so. For instance, the printer has not been working
since the past several days. The printer is under
AMC. The vendor is from Delhi. I have done the
best what I could have done. I have informed the IT
cell in the regional office with a copy to the Regional
Manager. I have informed the vendor also. The same
case with the water cooler, air conditioners, genset
as well as the scanner. There is very erratic power
supply in this place. I am planning to take up these
matters along with the requirement of ATM during
the regional level meeting, which is scheduled next
The SBM further added that even to use his positional
authority and power, he had to seek the concurrence of the
regional/zonal office. He gave an example related to the
transfer of clerical staff from the branch.
If I have to transfer any clerical staff, I have to
take the regional office into confidence. I can only
initiate disciplinary action against erring staff and
recommend them for transfer. It is the regional
office that can transfer an employee across branches.
Besides, the trade union plays an important role. It
might make an issue out of it. If I have to transfer
someone, I have to build a strong case against him
or her. In my position of over three and half year,
I have been able to transfer only one clerical staff.
It was possible because the customers helped me.
There were a lot of complaints about him. They
complained about him to the Regional Manager. It is
really difficult, hence rare.
Even the authorization process of routine transactions like
deposit or withdrawal was bureaucratic. In the case of
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Demand Draft with value less than Rs. 25,000, there would
be one authorized signatory (officer in charge of remittance),
however if the value was higher than Rs. 25,000, there
would be two authorized signatories (officer in charge of
remittance and the accountant). Many times it was observed
both the signatories would not be available at one point of
time or the Senior Manager (operations) would be busy with
some other work. The customer in that case would have to
wait for a longer time.
Sometimes such a situation was leading to inter-
personal conflict between the clerk and the accountant.
A clerk came and started authorizing a transaction
(which is not within his authorization limit, the
accountant had the passing power) at the computer
terminal of the accountant. The SM (O) got annoyed.
Verbal arguments followed
Accountant: How could you use my computer
without my permission?
Clerk: You were busy. A customer was
waiting. He was in a hurry. I wanted
to help him out.
Accountant: You could have told me that. You
cannot use my password for that.
Clerk: Customers are unhappy because of
people like you.
Accountant: Get lost. Do your job. Don’t teach me
what I should be doing.
(Field Notes)
Lack of Human Touch
Employees, in general, were unhappy about the insensi-
tiveness of the branch head and the accountant to their
personal problems. Dipti, a lady clerk in the branch
I took leave for 15 days. The BM did not even ask
me why I had taken such a long leave. The BM is
only concerned about work. He is not bothered
00076.indd 116 6/1/2006 6:41:08 PM
about others’ personal problems. Nobody in this
branch likes him.
Raj a peon in the branch, who had been in the branch for the
past ten years on a daily wage basis, mentioned an example:
On a particular day, I left office 15 minutes earlier
than the normal closing time. Jay scolded me the
next day, without even asking me why I had to
go off early. The work environment is worse than
martial rule. Even in the army, front-line soldiers are
listened to but here the front-line employees are not
properly cared for. Forget about the customers!
Alok started his professional career as a lecturer in Bhiwani
College. As a lecturer, he finished his Ph.D. before joining
this bank in 1978, as it was then considered one of the most
lucrative and prestigious jobs.
He claimed that he was an honest, sincere, and
hardworking boss. He proudly showed the appreciation
letter he has received from the Assistant General Manager
which mentioned that
I have performed well in this bank. I have got
appreciation letters from the Zonal Manager and
Assistant General Manager. The internal assessment
by the Zonal Office as Branch Manager has been
impressive. I was even selected to be the Faculty
Member at the Regional Training Center, which I
refused. I was even in the inspection department for
five and half years.
He was, however, unhappy and highly dissatisfied because
in spite of appreciation, he was not promoted in 2002.
I joined this bank as an Officer (Scale I) way back in
1978. I have been promoted only twice during my
24 years of service in this bank. I was promoted to
Scale III officer in 1993. I became eligible for another
00076.indd 117 6/1/2006 6:41:08 PM
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promotion since 1998. I have already cleared Part I
of CAIIB examination and would be clearing Part II
He further added
You must have a big boss at the top. Somebody
must be there in the Ministry to take care of you.
Performance is not the criterion for promotion.
He claimed himself to be a tough disciplinarian, acting
tough with undisciplined staff. He gave an example:
Many customers complained against a Head Cashier,
who was transferred to this branch from Faridabad
(a place 30 miles away) about his misbehavior with
them. He used to harass customers. I reported this
matter to the Regional Manager and took him into
confidence. The person was suspended. The trade
union, however, negotiated with the regional and
zonal office to withdraw the suspension order
and the person was transferred back to Faridabad
branch. This incident led employees to become more
He seemed to have little trust in the clerical staff; whom he
believed to be dishonest. He provided two examples:
We had to buy a stabilizer. I told a clerk to seek
quotations from the vendor. The minimum quoted price
was Rs. 10,000. I personally went to a vendor. To my
surprise, I found the price to be Rs. 8,000.
A vendor came to me and gave Rs. 1000. I was surprised.
On inquiry, I discovered that one of the clerical staff had
told him that I take commission on purchase. He did not
reveal the name of the clerk. I refused to take Rs. 1000.
There are many branches of this bank, where the branch
managers ask for commission on purchase. I am against
it. The image of the bank has been affected because of
the branch managers who asked for commissions.
The employees in general viewed Alok as impersonal, work-
centric and detached without any vision or desire for the
00076.indd 118 6/1/2006 6:41:08 PM
growth of the branch. ‘Financial Performance’ has been his
obsession with business growth through interests on loan
and credit. The focus has been retail lending.
Some of the clerical staff mentioned that even in the
segment of retail lending, the branch had not been able to
compete with private banks, which offered more attractive
interest rates and lesser degree of procedural bureaucracy.
A customer could get any loan with much less hassle from
any of the private banks, of which there were plenty in the
The deposit mobilization efforts had also been affected
as the SBM was more concerned with the lending retail
Unfortunately, the SBM is not interested in
mobilizing deposits. He is much more concerned
with the financial performance of the branch-earning
interests through loan. Over the last three years, the
focus has been on retail credits rather than savings
deposits. Before the current branch manager joined,
in the year 2001, this branch had mobilized ten
million. I visited as many villages as possible to
mobilize the deposits. The current BM had assured
me promotion. He did not even recommend my
name to the Regional Office. Promotion should
have been automatic. I have been superseded by
employees who are not as qualified as I am. I am
not aware if the BM has ever gone to villages to
mobilize funds. (Rocky, Daftari)
Visits of villages have been discontinued because
the current Branch Manager is very critical about the
expenses. He would even scrutinize the voucher for
five rupees. That is very unfortunate. (Kant, Officer)
In the past, during the festival of Diwali (the annual traditional
festival of lights), the branch used to present gifts to the
village heads, which has been discontinued as the SBM
started questioning its rationale and refused to pass the P/L
vouchers related to expenses incurred during such visits. As
one of the officers mentioned,
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He tries to be tough with the employees using his
positional power, which is unfortunate. One must
convince employees, not by using positional power,
but by setting examples. He should be willing to
know the job-related problems that an employee
faces while doing a job. He should not be biased but
be open-minded.
Jay had joined as an accountant in this branch three
months earlier. He seemed to be hard working, sincere and
responsible. He used to ensure that the premises were clean
before all the employees arrived at the branch.
However, he seemed to have little faith of others.
He was not comfortable in delegating work to others. He
mentioned that, “It is my responsibility. I am answerable to
higher authority. I cannot trust others.” In one instance,
An officer requested Jay to share some of his work
so that day-end reconciliation would be over soon
and they go home early. Jay refused. (Field Notes)
Jay would not take any decision without seeking the
approval or consent of the SBM.
It was a regular feature in the branch that customers had
to wait at the counters to open even after 10 am (the time a
counter should open). Employees used to come casually at
10 am and gossip for 10 to 15 minutes before they are told
either by the SBM or the accountant to take their seat. (Refer
to Annex D for a typical day in the branch.)
Employees at the counters usually stop work 15
minutes earlier than the scheduled lunch hour. They tell
customers to come after lunch time. The lunch time used
to last beyond 3 pm, till the customers were restless and
started shouting. As one customer pointed out
00076.indd 120 6/1/2006 6:41:08 PM
What can I say? I am uneducated. They know their
job better. It always takes two to three hours in this
branch. I plan things accordingly. Whenever I have
time I come to the bank. Everywhere it is like this
(an anonymous customer).
Rahul, an officer in the branch admitted that as most
customers of the branch were illiterate, they were not aware
of their rights. Such a branch could not survive in Delhi,
which is around 20 miles away. He added further
Customers in this branch are mostly illiterate and
are not very demanding, unlike the customers in
Delhi. Customers in Delhi are more knowledgeable
and also demanding. It is a challenge to convince
them. It requires extra effort.
Some of the employees were candid enough to admit that
customer service had been affected because of conflicts
between the officers and clerical staff and inter-union
Because of the conflicts between the officers and
staff, the image of the branch is getting affected. It
is within the power of the SBM to take disciplinary
action against clerical and subordinate staff. Yet
actions are not taken. Their unions are very powerful.
(Ranu, Officer)
Customers’ service in this branch suffers because of
staff-officer rivalry, inter-union rivalry and lack of
infrastructure (Kedar, Officer)
Kant felt that the management was handicapped and
constrained by the various bureaucratic and legal limits. He
further added that, “In spite of all these constraints, branches
need to be more proactive and the branch heads should
focus on transforming the branch so that they become more
proactive and customer centric. If branches of nationalized
bank like ours function the way it has been functioning for
the past three years, I am sure this bank would succumb to
the pressure from the private banks. How can we compete
with them?”
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122 ACRJ
Indian Financial System
The Indian financial system, as of today, is a mixture
of public and privately owned financial institutions, the
result of a planned economy gradually moving towards
free market status. The four main Indian financial industry
regulators are the Reserve Bank of India (RBI, similar to
the U.S. Federal Reserve); Securities and Exchange Board
of India (SEBI), the equivalent of the U.S. SEC; Insurance
Regulatory Development Authority; and the Ministry of
Besides managing Indian monetary policy, the RBI
supervises the commercial and cooperative banks, financial
institutions (such as development banks), and non-bank
finance companies. The Securities and Exchange Board of
India supervises the capital market participants such as
mutual funds, stockbrokers and investment banks. The
Insurance Regulatory Development Authority (IRDA)
regulates the functioning of players in the insurance sector.
Deregulation and Reforms in Banking Sector
The banking sector, since 1992 when it was gradually
deregulated, has become highly competitive with many
foreign and private banks operating along with 27 Public
Sector banks. Banking reforms which primarily includes
(a) reduction in Cash Reserve Ratio (CRR), (b) reduction in
Statutory Liquidity Ratio (SLR), (c) deregulation of interest
rate, (d) adoption of prudential norms in terms of Capital
Adequacy Ratio, (d) assets Classification and provisioning,
(e) dilution of government holding and allowing private
participation, (f) permission to foreign and private banks
to operate in India, (g) allowing banks to become universal
bank by offering bundle of complementary products and
services, (h) emphasis on corporate governance and
00076.indd 122 6/1/2006 6:41:08 PM
risk management were introduced on the basis of
recommendations from various banking reform committees
like Narasimham Committee I report (1992) and
Narasimham Committee II (1998).
Decades of government-controlled banking with
politically and socially motivated lending often marked
with cronyism, favoritism and lack of transparency have
saddled several banks with sizeable non-performing assets.
PSBs, which accounted for more than 78% of total banking
industry assets in the year 2000, was however, saddled with
NPAsg (Rs. 830 billion), falling revenues from traditional
sources, lack of modern technology and a massive work-
force. Higher NPA dilutes the assets base of a bank and the
bank’s survival becomes doubtful in the long run, if NPA is
not controlled and managed.
Deregulation and reform were introduced to make
public sector banks more competitive as most of these banks
were saddled with excessive Non Performing Assets, excess
manpower prior to deregulation.
Public Sector banks were not bothered about their
profitability as their primary mandate was to finance
government sponsored schemes, and focus on priority sector
(as identified by government) like agricultural lending. These
advances were mostly refinanced by various refinancing
NPAs form a substantial drag for individual banks
as well as the banking system of a country. They represent
the poor quality of the assets of the bank and have to be
provisioned for using capital, which have a negative impact
on a bank’s profitability as well as the erosion of its asset
In order to empower Indian banks to recover and
manager NPA, the government introduced the Securitisation
and Reconstruction of Financial Assets and Enforcement of
Security Interest (SARFAESI) Act in 2002. The act enabled
banks to attach and sell off pledged assets in case of default,
a feature that has been used considerably by the banks to
gA non-performing advance is defined in India as one with interest or principal
repayment installment unpaid for a period of at least two quarters.
00076.indd 123 6/1/2006 6:41:08 PM
124 ACRJ
improve their NPA situation in recent years, reducing them
to levels comparable to those of private banks.
Ownership in Public Sector Banks
The Public Sector banks in India are owned by the
government in the majority. The composite holding pattern
of Public Sector banks as of December 2004 indicates
that 68.76% of the shareholding lies with the government
whereas only 31.24% of the shareholding is accounted by the
non-governmental shareholders.
Players in the Banking Sector
The commercial banking structure in India consists of:
Scheduled Commercial Banksh and Unscheduled Banks.
There are 27 public sector banks, 30 private sector banks, 36
foreign banks, 196 regional rural banks, 57 scheduled urban
co-operative banks, and 16 scheduled state co-operative
banks with around 65,000 branches throughout India.
The State Bank of India and its seven associate
banks constitute the SBI group within Public Sector Banks.
There are 19 other banks which have been nationalized
in two phases in 1969 and 1980. Regional Rural Banks are
sponsored by public sector banks located in rural regions in
India to provide the inhabitants of rural regions access to
banks. Cooperative banks are formed by a group of people
to collect deposits and invest these deposits in various
investment outlets. While the registration, administration
and liquidation of urban co-operative banks are governed
by the provisions of State Co-operative Societies Act, the
Reserve Bank regulates and supervises their banking related
functions under the Banking Regulation Act, 1949.
hScheduled Commercial Banks constitute those banks which have been included in
the Second Schedule of Reserve Bank of India (RBI) Act, 1934. RBI in turn includes
only those banks in this schedule which satisfy the criteria laid down vide section 42
(6) (a) of the Act.
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Competition in the Banking Sector
After the banking sector was deregulated, a host of
foreign and private banks have started their operations
in India. Foreign banks which were allowed to expand
their operations in the country through subsidiaries has
galvanized the domestic banking sector, dominated so far by
public sector banks.
Though the private and foreign banks cannot match
the PSB’s wide reach (in terms of branch network), great
size and access to low cost deposits, they have expanded
their reach through mergers and acquisitions of financially
weak banks in India. Also, following India’s commitment
to the WTO (World Trade Organization) agreement in
respect of the services sector, foreign banks, including both
new and existing ones, have been permitted to open up to
12 branches a year with effect from 199899 as against the
earlier stipulation of 8 branches.
Moreover, private and foreign banks have pioneered
internet banking, phone banking, remote banking, mobile
banking, debit cards, Automatic Teller Machines (ATMs)
and combined various other services and integrated them
into the mainstream banking arena. ATMs have helped the
private and foreign banks create a niche market for them
in urban areas among the educated customers. This is in
stark contrast with what is happening in the PSBs, which
seem to be still grappling with disgruntled employees in
the aftermath of successful VRS schemes and unionism
following the government’s decision to reduce its stakes in
various PSBs.
Meanwhile the economic and corporate sector
slowdown has led to an increasing number of banks focusing
on the retail segment. Many of them are also entering the
new vistas of insurance. Banks with their phenomenal reach
and a regular interface with the retail investor are the best
placed to enter into the insurance sector. Banks in India
have been allowed to provide fee-based insurance services
without risk participation, invest in an insurance company
for providing infrastructure and services support and set
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126 ACRJ
up of a separate joint-venture insurance company with risk
The industry is currently in a transition phase. On the
one hand, the PSBs, which are the mainstay of the Indian
Banking system, are in the process of shedding their flab
in terms of excessive manpower, excessive non Performing
Assets (NPAs) and excessive governmental equity, while on
the other hand the private sector banks are consolidating
themselves through mergers and acquisitions as well as
leveraging technology.
Banks in public and private sectors (which includes
foreign banks) are currently competing on product
differentiation and multiple channels of service delivery.
There is a virtual war in terms of interest rate. Banks are
customizing their products and services in order to cater
various niche customer segments. Banks are also competing
on deposit rates and lending rates.
The banking industry in India is currently marked
with (a) increased competition and professionalism, (b)
booming retail segment compared to corporate segment,
(c) movement towards universal banking, (d) product
innovation and branding, (e) multiple channels of service
delivery, and (f ) extended banking hours and so on.
Increased competition
The opening of the banking sector to private as well
as foreign banks has made the banking sector highly
competitive. Banks are competing by differentiating their
products and services through lower interest rate, personal
attention and service at the door step. Increased competitive
pressure is forcing public sector banks to adapt to changing
business environment so as to remain competitive.
Between 19911992 and 20002001, SBI, the largest
Indian bank, witnessed a decline in asset market share from
28% to 24% while its loan market share dropped from 27%
to 22%. The deposit share, on the other hand, stayed pretty
much the same at 23%. The asset, loan and deposit shares of
the top 10 banks all fell from close to 70% to below 60%.
00076.indd 126 6/1/2006 6:41:08 PM
Booming retail segment
Changing demographics, a rapidly growing middle-class,
rising disposable income, changing lifestyles, aspirations,
and increasing ability of the people to take credit risk are
providing banks with the opportunity to shift their lending
orientation to retail financing. In the financial year 2003, of
the total loan disbursement retails loan were 51% compared
to 19% share in 1999.
Universal banking The new growth avenue
Universal banking refers to cross-selling of financial
products and enables a bank to act as one- stop financial
supermarkets. Today, this model is attracting existing banks.
This may lead logically to promoting the concept of financial
supermarket chain, making available all types of credit
and non-funded facilities under one roof or specialized
subsidiaries under one umbrella organisation.
ICICI took the lead towards universal banking with
its reverse merger with ICICI Bank. IDBI has merged its
banking wing (IDBI Bank) to transform itself into a universal
bank (see Exhibit 1 for Major Banks’ Products and Service
Product innovation and branding
Product innovations are a must in today’s competitive
environment as they send out the message to customers that
banks are constantly striving to offer them enhanced value
and convenience. In the last decade many new products like
mobile banking, real-time net banking, net safe which has
made online shopping much safer and enabled shopping on
the net using debit cards.
Banks are customizing their solution according to
the customer’s requirement. Different types of products are
being offered to customers according to their requirement.
Innovations are not limited to the product and services
00076.indd 127 6/1/2006 6:41:09 PM
128 ACRJ
offerings, banks are also looking at their customer databases
and seeking ways to improve their relationships with their
customers resulting in data-led marketing efforts. This,
in turn, leads to relationship pricing, which while not an
innovation in product is certainly one in terms of a banks’
effort to build relationships with its customers and enhance
the brand.
Multiple channels of service delivery
Banks have started offering their services in multiple
channels beyond the traditional mode of service delivery
through physical branches (see Exhibit 2 for major banks’
delivery channels). As newly established private banks have
the disadvantage of reach in terms of branch network, they
are in the forefront in using IT-enabled service delivery
channels (like ATM, internet banking, mobile banking) as
well as through direct selling by employing sales executives.
Private banks have been comparatively more aggressive
than the public sector banks in leveraging technology in
expanding their customer bases (see Exhibit 3).
Extended banking hours
Foreign banks initiated the trend of 7-days banking in
India. Banks in the public sector as well as private banks
were forced to extend banking hours depending upon the
needs of the local customers. Most banks today deal with
customers for at least five to six hours on a daily basis
compared to four hours five years back.
Changing expectations of customers
During the past decade, the banking industry in India has
witnessed several regulatory changes that have resulted in a
heightened level of competition among the banks. This has
qualitatively influenced the expectations of the customers.
00076.indd 128 6/1/2006 6:41:09 PM
Customers are no longer loyal to one bank
Customers are no longer loyal to a particular bank. As banks
are competing with each other on the basis of interest rate
(since it was deregulated), customers do not mind switching
from one bank to another that offers marginally higher
interest rate on deposits or advances with lower interest rate.
Consequently, banks cannot take the loyalty of its existing
customers for granted.
Tech-savvy urban customers
Customers in urban areas are becoming tech savvy. Most of
them, in the recent past, have started expect to IT-enabled
banking services like internet or mobile-based dealings with
banks, Automated Teller Machines (ATM), Electronic Funds
Transfer (EFT), Smart Card, Net banking, and so on. The
concept of on-line banking has also caught the imagination
of educated customers in a big way.
Single window based universal banking
There is a growing trend towards customers desire to
interact with one financial institution for all their needs like
savings, advance, insurance and so on. Customers seem to
prefer banks that offer a variety of banking products, rather
than dealing with multiple banks for different needs.
Desire for better and personalized/customized
customer service
Customers have started demanding portfolio of products
and services customized to their needs. Customers tend
to prefer a bank that is ready to customize the products/
services portfolio that meets his/her needs. Customers,
especially urban based ones, seem to prefer banks with
00076.indd 129 6/1/2006 6:41:09 PM
130 ACRJ
ATM or on-line banking facilities as they are hard pressed
for time.
Desire for quick service
Customers have started demanding quick service. They are
no longer comfortable with waiting at the counters or the
procedural delays prior to loan disbursal.
Public sector banks vis-à-vis private and foreign banks
The major differentiating parameter that distinguishes
private and foreign banks from the public sector banks
is the level of service that is offered to the customer. The
focus of private banks has always been centered around the
customers understanding their needs, preempting him
and consequently delighting him with various configurations
of benefits and a wide portfolio of products and services.
These banks have leveraged on their strengths and
competencies to achieve higher degree of managerial
and operational efficiency, flexibility, superior product
positioning and higher employee productivity skills.
The private banks with their focused business and
service portfolio have a reputation of being niche players
in the industry. Such a focussed strategy has helped
these banks to concentrate on few reliable high net worth
companies and individuals rather than cater to the mass
market that have allowed most of these banks to deliver
superlative levels of personalized services. Private banks
have become popular among the educated mass living in
urban and semi-urban locations. Private banks have been
relying more on IT-enabled delivery channels like ATM,
call center or on-line banking than the traditional brick and
mortar branches. ICICI bank, which has become the fastest
growing bank in India by April 2003 used to handle 53% of
its business through ATM compared to only 4% in the year
2000 (see Exhibit 4).
00076.indd 130 6/1/2006 6:41:09 PM
The comparative disadvantages of public sector
banks are two-fold: (a) the ratio of non-interest income to
interest income is lower in comparison to other categories
of banks; (b) the ratio of wage bill to assets is substantially
higher in their case compared to other categories of banks.
The primary low viability of the public sector banks comes
from reason exogenous to them. It is the high wage cost,
both in relative and absolute terms that are pulling down
these banks. Such high wage costs are due to powerful
employees’ unions’ pressures and to the lower measures of
mechanization and computerization. These are the legacies
of the past. Employees’ unions are becoming weaker. Public
sector banks have begum to leverage technology to enhance
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132 ACRJ
Structure of Reporting, Relevant HR Policies, Products and
Services, Key Performance Indicators of the Bank
The Corporate (Central) office formulates policy guidelines
within the guidelines stipulated by the Reserve Bank of
India. The Zonal and Regional offices implement these
policy guidelines (see Figure 2).
These administrative offices also ensure that service
branches do not flout the policy guidelines through internal
audit and external audit mechanisms.
Manpower in the Bank
There are around 40,000 employees working for the bank,
which includes 12,000 managerial, 20,000 clerical and 8,000
subordinate staff cadres.
Promotion and Transfer Policies
Managerial executives (Scale I onwards) are recruited either
directly or by promoting clerical staff through internal
Figure 2. Structure of the Bank
Corporate Office
(Central Office)
dealing with
dealing with
dealing with
00076.indd 132 6/1/2006 6:41:09 PM
examination. Employees who are directly recruited into
managerial cadre are also known as Directly Recruited
Officers. Both the managerial executives and clerical staff are
recruited through written and oral examinations at all India
The transfer policy of the bank is cadre-based. The
clerical and subordinate staff members are not transferred
outside the region. The employees in managerial (officer)
cadre are transferred across India. Transfer of employees
across branches, which are under the same regional office
is handled by the regional officer, whereas transfer across
regions or zones are handled by zonal office and corporate
(also known as central) office, respectively. In practice, it
is very difficult to transfer a clerical or subordinate staff
without taking the employees’ union into confidence.
Gradation of Officers
Employees usually join the bank at officer grade (Scale I).
They get promoted on the basis of their performance
to higher grades after completing minimum tenure in a
particular grade. The gradations of officer (managerial) cadre
Scale I: Officer Scale II: Manager
Scale III: Senior Manager Scale IV: Chief Manager
Scale V: Assistant General Manager
Employees Unions/Association
There is one Officers Association at all India level. Each of
the employees belonging to managerial cadre is eligible to
be a member of the Officers Association. There are many
employees’ unions patronized by various national level
political parties. Each employee belonging to clerical and
subordinate staff is eligible to be a member of one of the
employees’ unions. One of the employees of the branch
is nominated or elected to be the representative of the
employees’ unions or officers’ association with a role to take
00076.indd 133 6/1/2006 6:41:09 PM
134 ACRJ
care and protect the interests of the members of the union or
association he/she is representing. He/she is designated as
Branch Representative.
Scaling of Branches
The branches are categorized into various scales on the basis
of aggregate deposits. A branch with aggregate deposits
(which includes Savings, Current, Fixed and Term Deposits)
less than 30, 100, 500 and 1000 million is designated as ‘Scale
I’, ‘Scale II’, ‘Scale III’ and ‘Scale IV’ branch and is headed by
Officer (Scale I), Manager (Scale II), Senior Manager (Scale
III) and Chief Manager (Scale IV) respectively. A branch
with aggregate deposits exceeding 1000 million Rupees is
designated as Scale V branch and is headed by an Assistant
General Manager (Scale V).
Products and Services
This bank offers various products and services in different
customer segments: corporate, retail, and rural.
Deposit products/services
It offers various deposit plans that a customer can choose
from depending on the term period, nature of deposit and
its saving and withdrawal features. It includes savings
bank deposit, current account deposits, and fixed deposits.
The bank also offers the Credit/Debit Card facilities to its
The bank also offers various kinds of loans and advances
facilities for its customers like Housing loan, Home
Improvement Loan, Education Loan, Car Loan, Two-wheeler
00076.indd 134 6/1/2006 6:41:09 PM
loan, Consumer Durable loan, Personal computers loan,
Personal loan, Marriage Loan, Festival Loan, Advance
against Securities, Overdraft against Property, Pensioners
Loan, Defense Pensioners’ Loan, Professional Loan, Traders
Loan and so on.
In the rural sector, the bank provides priority
sector advances catering to the needs of priority sector
like agriculture, small scale industries, small businesses
and government sponsored schemes, as identified by the
Government of India.
The bank also provides services like electronic remittances,
collection and clearances. Apart from these, the bank
also acts as an agent for undertaking various types of
government businesses like disbursement of pensions,
handling government bonds and various deposit schemes,
collection of central and state taxes from various parties and
so on.
Key Performance Indicators
The key performance indicators of the bank as on 31
December 2004 are given below:
[Conversion rate in 20032004: $1 = Rs. 45 (approx.)]
Total Deposits 8000 billion rupees
Total Advances 4000 billion rupees
Total Investments 3700 billion rupees
Total Assets 9400 billion rupees
Net Profit 60 billion rupees
Capital Adequacy Ratio 14%
NNPA 2.2
Operating Profits to Working Funds 2.3
Business per Employees 30 million rupees
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136 ACRJ
Certified Associate of Indian Institute of Bankers. A bank
employee becomes a certified associate of Indian Institute
of Bankers if he passes examinations conducted by Indian
Institute of Bankers. The examination is conducted in two
parts: part A and part B. An employee who is a certified
associate gets some additional marks while seeking
promotion in the bank.
Among the tools available to the Central Bank of a
country to influence and control the monetary aggregates
of the country, the most powerful is that relating to cash
reserve requirements imposed on banks. Every scheduled
commercial bank is required to maintain with the RBI every
fortnight a minimum average daily cash reserve equivalent
to 3% of its Net Demand and Time Liabilities (NDTL)
outstanding as on the Friday of the previous week. The RBI
is empowered to vary the CRR between 3% and 15%. At
present CRR rate is 4%.
Doubtful Assets
An asset would be classified as doubtful if it remained in
the sub-standard category for 12 months.
Gross non performing assets
Gross Non Performing assets (GNPA) is the total
outstanding of all the borrowers classified as non-performing
assets (viz, substandard, doubtful and loss asset).
00076.indd 136 6/1/2006 6:41:10 PM
Loss Assets
A loss asset is one where loss has been identified by the
bank or internal or external auditors or the RBI inspection
but the amount has not been written off wholly. Such an
asset is considered uncollectible and of such little value
that its continuance as a bankable asset is not warranted
although there may be some salvage or recovery value.
Net Non Performing Assets
Net Non Performing assets (NNPA) is the Gross NPA
minus gross provision made, unrealized interest and
unadjusted credit balances with regard to various NPA
Non-Interest Income
Non-interest income is primarily commission or fee based
income, in contrast to income from the interests earned
on the advances disbursed. Non-interest income includes
commission on drafts, remittances, fee on debit or credit
cards and other services.
Under section 24 (b) of the Banking Regulation Act, 1949,
every bank is required to maintain at the close of business
every day, a minimum proportion of their Net Demand and
Time Liabilities as liquid assets in the form of cash, gold
and un-encumbered approved securities. The ratio of liquid
assets to demand and time liabilities is known as Statutory
Liquidity Ratio (SLR). Present SLR is 25%. The RBI is
empowered to increase the SLR up to 40%.
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138 ACRJ
Sub-standard Assets
A sub-standard asset is one, which has remained NPA for a
period less than or equal to 12 months.
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A Typical Day in Gurgaon Branch
8:30 A.M The accountant reached the branch. He took his breakfast in a small roadside
restaurant, which included a glass of milk and bread sandwitch.
8:45 A.M He opened the shutter of the branch. The sweepers cleaned the branch. The
accountant supervised them.
9:30 A.M The accountant ensured that everything was in order before the SBM reached the
9:45 A.M. The SBM reached the branch. He went straight into his cabin.
9:45 to 10:00 A.M Officers started reaching the branch. Clerical staffs started arriving around 10: 00
A.M. Customers were seen waiting on the counters. [Banking hour starts at 10:00
10:00 to 10:15 A.M. Clerical staff were still coming in and busy exchanging pleasantries and gossiping,
while customers were waiting. The accountant was found helplessly requesting all
of them to go to their respective counters.
10:15 A.M. The SBM came out of his cabin and started shouting at the clerical staff. They
occupied their respective positions. The accountant found three employees were
absent without any information. He did the rescheduling with protests from the
clerical staff.
10:45 A.M. The staff on the counter started their work
11:15 A.M. Three customers came to the accountant to get their passbooks manually updated.
The printer had not been working for the past four days. The accountant obliged
them and started updating the passbooks
12:00 A.M. There was a big argument between a customer and a clerical staff on savings
counter. The customer was unhappy as he had to wait for more than 20 minutes on
the counter, as the clerk was busy talking over phone. The accountant had to rush
in and pacify the customer.
1:45 P.M. Employees were found getting ready to take lunch. All lady employees started
sitting around a particular table. All officers were seen entering into the cabin of
the SBM. The peon was found telling customers to come after lunch at 3 P.M. [The
lunch time was between 2 P.M. to 3 P.M]
3:00 P.M A number of customers were seen waiting on various counters. There was no sign
of clerks on the counters. They were on a post-lunch stroll on the road outside the
branch. Some were still smoking and having tea outside.
3:10 P.M Customers became restless and started shouting. The clerical staff returned to their
respective seats.
3:45 P.M. Employees started packing up things for the day. The peon was found telling
customers who were arriving then to come on the next day. The counters, for all
practical purposes, were closed. [The closing hour is 4 P.M.]
4 P.M. All employees went out of the branch for a stroll, to smoke or gossip in groups.
4:15 P.M.–5:00 P.M. Clerical staff were busy in reconciling their respective accounts
5:00 P.M. All clerical staff left the branch. The officers stayed on.
5:00 P.M.–7:00 P.M. The accountant prepared the end-of the-day statement got it signed from the SBM.
The accountant was the last person to leave the branch visibly exhausted and tired.
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140 ACRJ
Exhibit 1
Major Banks’ Products and Service Portfolio
Bank Retail Banking Credit/Debit Consumer Auto Housing Mutual Insurance
Deposits Cards Finance Finance Finance Funds
Allahabad S, AI L L L L N N
Punjab S, AI L L L L N N
Corporation S, AI N L L S N N
IDBI*** L, U, M N L L L N N
ICICI*** L, U, M S S S L S L
Citi Bank**** L, M S S S L L N
HSBC**** L, M S S S L N N
L: Limited Presence
S: Substantial Presence
AI: All India Presence
U: Urban; M: Metro;
Y: has presence
N: No presence
*SBI group; **Nationalized Bank; ***New Private Bank; ****Foreign Bank
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Bank Branch ATM Call Center Sales Agents Internet Direct Mail Tele Banking
Allahabad S L N N N N N
Punjab S L N N L N Y
Corporation S L N N L N N
Citi Bank L S Y Y S Y Y
Exhibit 2
Major Banks’ Delivery Channels
L: Limited Presence; S: Substantial Presence; Y: Has presence; N: No presence
00076.indd 141 6/1/2006 6:41:11 PM
142 ACRJ
Exhibit 3
Ratio between Physical Branches and ATM of Some Major Banks in India
Banks Branches ATMs ATM/ Branch Ratio
State Bank of
9038 3900 0.43
HDFC Bank*231 732 3.17
UTI Bank*223 1108 4.97
ICICI Bank*540 1675 3.10
Dena Bank*** 1135 102 0.09
Exhibit 4
Delivery Channel Mix of ICICI Bank
(in per cent)
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