Public Sector Banks recorded highest ever aggregate net profit of ₹1.
41 lakh crore during the period of 2023 to 2024.

Public Sector Banks offer improved HR policies. They also provide better welfare measures.

Public Sector Banks : Out of total 1,60,501 bank branches, 1,00,686 bank branches are located in Rural and Semi-Urban (RUSU) areas.

Gross advance of Scheduled Commercial Banks stood at Rs. 175 lakh crore in Mar-24

The Government has been actively supporting the Public Sector Banks ecosystem. It takes care of both business and employee welfare. Its aim is to maintain stability, transparency, and growth. Over the past decade, the Government has taken multiple initiatives focused on reforming and empowering both citizens and staff.Following is a brief snapshot of the reforms in banking sector:

REFORMS IN THE BANKING SECTOR AND PERFORMANCE OF PUBLIC SECTOR BANKS (PSBS):

RBI initiated Asset Quality Review (AQR) in 2015 to identify and address the issue of stress in the banking system. After banks recognized these issues transparently, they withdrew the special treatment of restructured loans. Stressed accounts were then reclassified as Non-Performing Assets (NPAs). Expected losses on stressed loans, not provided for earlier, were provided for. This was due to the special treatment. As a result, higher NPAs occurred, which peaked in 2018. Higher NPA and the need for provisioning deeply impacted the financial parameters of banks. This situation impeded their ability to grow. Banks struggled to lend to productive sectors of the economy.

Since 2015, the Government implemented a comprehensive 4R’s strategy. The strategy includes Recognising NPAs transparently, Resolution and Recovery, Recapitalising PSBs, and Reforms in the financial system. These actions address the challenges faced by PSBs. The Government’s overarching policy reforms have led to significant improvements. The financial health and robustness of the banking sector, including PSBs, have improved significantly. Notable improvements are visible through: –

1. Improvement in Asset quality —

• Gross NPA ratio of PSBs declining to 3.12% in Sep-24 from 4.97% in Mar-15 and from a peak of 14.58% Mar-18.

2. Improvement in Capital adequacy—

• CRAR of PSBs improving by 393 bps to reach 15.43% in Sep-24 from 11.45% in Mar-15.

3. During FY2023-24, PSBs have recorded highest ever aggregate net profit of ₹1.41 lakh crore against net profit of ₹1.05 lakh crore in FY2022-23, and recorded ₹0.86 lakh crore in the first half of FY2024-25.
4. During the last 3 years, PSBs have paid total dividend of ₹61,964 crore.

Public Sector Banks continue to expand their reach to every nook

PSBs continue to expand their reach to every nook and corner of the country to deepen Financial Inclusion. Their capital base has strengthened and their asset quality has improved. Now they are able to go to market and access capital instead of depending upon the Government for recepitalisation.

• To deepen the Financial Inclusion in the country, 54 crore Jan Dhan accounts have been sanctioned. More than 52 crore collateral-free loans have been granted. These loans fall under various flagship financial inclusion schemes (PM Mudra, Stand-Up India, PM-SVANidhi, PM Vishwakarma). Under the Mudra scheme, 68% of beneficiaries are women and under PM-SVANidhi scheme, 44% of beneficiaries are women.
• The number of bank branches have increased from 1,17,990 in Mar-14 to 1,60,501 in Sep-24. Out of 1,60,501 branches, 1,00,686 are located in Rural and Semi-Urban (RUSU) areas.
• KCC Scheme aims to provide the short-term crop loan to farmers. Total number of operative KCC Accounts as on September 2024 stood at 7.71 crore with total outstanding of Rs. 9.88 lakh crore.
• The Government of India (GoI) has consistently supported the MSME sector. They have ensured the flow of credit at affordable rates through various initiatives. The MSME advances registered a CAGR of 15% during the last 3 years. Total MSME advances as on 31.03.2024 stood at Rs. 28.04 lakh crore, posted an annual growth of 17.2%.
• The gross advances of Scheduled Commercial Banks grew from Rs. 8.5 lakh crore to 61 lakh crore during 2004-2014, which has significantly increased to Rs.175 lakh crore in Mar-2024. 

HR POLICIES AND WELFARE MEASURES IN PUBLIC SECTOR BANKS

Transfers in PSBs:

With an aim to promote greater transparency, a comprehensive advisory has been issued. This ensures the formulation of a uniform, non-discretionary transfer policy. It is to be incorporated by the PSBs in their respective transfer policies.

In respect of women employees, PSBs have been, inter alia, advised that :

1. Women employees will work in nearby places, stations, or regions.
2. Officers up to Scale III will be placed in their respective linguistic regions to ensure smooth customer service.
3. Additionally, transfers will be considered for marriage, spouse, medical, maternity, child care, and postings far away.
4. Transfers will be automated by creating an online platform where employees can specify location preferences for transfers and promotions.

Welfare Measures for PSB Employees:

1. 12^th Bipartite Settlement:

Through the implementation of 12^th BPS, the bank employees received a 17% increase in salary and allowance (Rs. 12,449 crore) including a load of 3% (Rs 1,795 crore).

Major Highlights:

1. New pay-scales for all cadres, as per MoU and Cost Sheets.
2. Change in base year to 2016 for working out DA/DR. This applies to AICPI for Industrial workers on base 2016. It involves replacing the existing base year, i.e. 1960. There is also a revised formula for calculating DA/DR rates for in-service staff and pensioners/ family pensioners.
3. Award staff will be re-designated as ‘Customer Service Associates’. This change aims for a better customer experience through higher delegation. They will have an expanded role with enhanced special pay.
4. Revised halting rates / lodging expenses, deputation allowance and Revised rates for reimbursement of expenses on road travel.
5. Special leave provisions for women employees include leave during menstrual period. They also cover infertility treatment, second child adoption, and events of stillbirth.
6. Monthly ex-gratia amount to the pensioners:

3. Ex-gratia to pre-1986 retirees:

Ex-gratia to Pre-1986 retirees and their families have been increased from Rs. 4,946/- and Rs. 2,478 respectively to Rs. 10,000/- per month in both cases. It will benefit 105 retirees and 1382 spouses. Total additional cost is Rs. 4.73 crores per annum. It is implemented since Feb’2023.

4. DA Neutralisation:

Pre-2002 retirees received 100% DA neutralization, benefiting 1,81,805 beneficiaries at an additional annual cost of Rs. 631 crore, effective from October 2023.

5. Pension Option to Bank resignees:

Option to opt for pension was provided to bank resignees who were otherwise eligible to join pension scheme. This measure will benefit approximately 3198 bank retirees and families. The total additional cost is Rs. 135 crore per annum.

Staff Welfare Fund (SWF):

Working and retired officials can benefit from these provisions.

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