Are the promotion policies of the Bharatiya Banks the reason for the rising NPAs? - An Ethmos view

So finally Vijay Mallya has fled the country by making banks pauper by more than Rs. 9,000 Crores.  It is a totally different matter that the other companies owned by the Vijay Mallya-backed UB group including Mangalore Chemicals and Fertilizers Limited has posted a profit of more than Rs. 300 Crores in the quarter ending December 2015 (a fact that our paid media presstitutes will never highlight and there are no loophole-free laws to attach the profits of a profit-making sister concern to that of a loss-making concern).  More on the "untold" aspects of the Vijay Mallya story afterwards.

Today we are going to discuss a much deeper rot that has set into the banking system, which threatens not only the base of the banking but also that of the entire economy because a major portion of the common man's hard-earned money is lying with these banks and a loss of these banks means the loss of our money to be precise.  In 2015, the RBI Deputy Governor had made a statement that the high NPAs are due to the poor credit appraisal skills of the bankers.  We had published an article regarding the same.

We also agree, in part, to the statement made by the Dy. Governor, although we would like to analyze the problem to its root rather than mere name calling.  So, what is the reason behind the poor credit appraisal skills of the bankers?  Simply put it, the human resource quality of our banks have deteriorated to an all-time low due to various flawed HR policies adopted by our Bharatiya banks.

Primary Reason: - Blatantly unscientific promotion policies of the banks wherein a person who joins as a peon or a sweeper can rise up to become a clerk or even a manager without much resistance provided he can read or write properly.  And for that matter, a person joining as a mere clerk can get promoted to the managerial level in as low as 3 years.

Why we think it is unscientific?  Because for the simple reason that such liberal and lenient policies are not followed in any other departments other than the banking industry.  For example, a person joining as a peon or a class III or even class II official cannot dream of jumping into class I unless he is having at least 15 to 20 years of quality experience.  Further the ratio of such promotions is kept at a bare minimum of 10% (at the maximum) and the government relies primarily on the UPSC civil services exam or the SSC recruitment tests for taking quality talent as direct recruits from the open stream rather than playing "promotion-promotion" within the population of class III/IV employees.  But the exact opposite goes on in the banking sector.  Nowadays it has become very much easier for any person to join the bank as a clerk since the vacancies are too many, thanks again to the flawed HR policies wherein they never calculated the optimal HR requirement for more than 30 years (the banks did not do any meaningful recruitment starting from the 1970s and woke up only in the late 2010s to  find that a majority of its work force will retire down by the end of 2020).  In the huddle and hurry of things, the banking boards tweaked their promotion policies in order to promote more clerical staff to the officer cadre in order to augment the supervisory capacity of the bank.  They thought it easier to promote the existing clerical staff (since they believed that the attrition level will be lesser in case of clerical promotees) rather than taking fresh "probationer" talent from the open market.  Although the recruitment of probationers was done but the same was much less as compared to the requirement and the banks depended more on their promotions rather than fresh recruitment.

So what is wrong with it??  To answer this question, you have to first question the government policy of recruiting fresh Civil Service Officers in the IAS, IPS, and other All India Services wherein the government recruits hardly 30-year-olds into senior government positions wherein they will be taking policy decisions and supervise their class II/III juniors who will have more experience than the age of the class I probationer.  The reason for conducting a highly competitive exam and recruiting from a much bigger pool is that you get the best of the best talent at the national level.  The problem with promoting from clerical or sub-staff category is that the "competing talent" is itself not of the optimum quality.  For example, most of the clerical staff have joined services by competing for vacancies at the "state level" rather than national level and even worse goes for the class IV or the sub-staff categories which are recruited directly through the employment exchanges without much of a written exam.  Now when these people complete say 3 to 4 years of experience, the banks make them eligible for managerial position.  Hence, the competing pool for the managerial position consists of sub-optimal talent recruited at the state level rather than the best talent recruited after conducting a national level competitive exam of a very high difficulty level.  And furthermore, if the person who joined as clerk was so talented to become a manager, why didn't s/he clear the Probationary Officers exam directly and joined as a PO?? We hope you got our point.

Now the relation with this policy to the NPAs in the banking sector is that when a person with a talent level lesser than the person who is trying to cheat the bank by forging documents or showing inflated figures in order to avail higher credit than s/he can repay, can this "promotee" officer be in a fit state of mind to analyze these tricks and tactics and save our public money from going into the wrong hands???  Are the present lot of new bankers competent enough to protect our money??  That's the big question.

Of course, another problem is also there wherein the banks are blatantly promoting the sub-staff into clerks and clerks into officers thereby creating huge gaps in the multitasking work like filing of documents, dispatching mails, cleaning of desks/cupboards, etc. which will not be done by the "newly promoted" sub-staff; and which in turn lead to mismanagement of resources as well as time.  No wonder we are seeing branch managers in various banks writing dispatch books themselves and many a times going to dispatch the letters also themselves?  He he he...what a manager....Are you listening PM and FM Sir??

The end of my son’s first journey – Mr. Nobody speaks out his mind

My son, Aryan and many of his friends, will be finishing the first and the most important part of their life's educational journey in a matter of few days - their PRESCHOOL.  Although preschool education is a totally and absolutely neglected area in our country with the government not bringing in any regulation or restriction on the practice of this intricate art of molding young minds, there are some exceptional institutions in our country which have made it not only their responsibility but their mission to make sure that they give their best to our children.  And we are thankful to this institution for taking care of my son and many like him and making sure that the foundations of their knowledge are well laid in their little minds – and that institution is none other than Kidzee Vesu (Surat).

When we got transferred to Surat from our rural posting from Jamkhandi (Bagalkot District, Karnataka), our son was around 4 years old and had attended only minimal regular schooling (since we had admitted him to a local school in that village but he refused to go since that kind of traditional education did not fit his style of learning).  Hence, we were forced to do homeschooling for our child till we got transferred to Surat and did whatever best we can at home to teach him everything he wished to learn.  After our transfer to Surat, we searched everywhere for admission of our child as we had come in the middle of the year, i.e. October, and we were apprehensive that many schools may not grant him any admission due to the fact that he has not completed the first half year of schooling.  Although finding a playschool or nursery was not that big a challenge, since as I mentioned above, the preschool education segment is a totally unregulated and free-for-all field where every Tom, Dick, and Harry has opened up a preschool, even in shanties which can hardly be termed as a house, let alone a preschool.  And yes, everyone was willing to give Aryan an admission to their "preschools" (just to give a term of expression to such entities!) since all they cared for was the money that they will be earning.  For them, we and our son, were their "customers".  And this was what irritated us the most - if you treat us like customers, tomorrow you may not give us an honest opinion regarding our child, which may sometimes be negative and requires corrective action and would be very important to shape the child's personality in a positive direction.

Luckily for us, since we were new to Surat, we were not much aware of the roads and took a wrong turn to reach our home but that wrong turn turned out to be right one for us since we were able to see Kidzee nestled in between the houses.   Honestly speaking, we never knew that there was a Kidzee in the Vesu area of Surat and the fact that the Kidzee people never put any stupid advertisements in the newspapers or pamphlets added to our ignorance!  I strongly believe that a good brand never needs cheap advertising strategies and the brand name itself, the quality of its people, the level of its curriculum, and the hard work, dedication, and perseverance of the staff do the marketing job for them automatically. The next day we visited Kidzee Vesu and were guided properly and were relieved finally that we will be sending our child for his first journey in a safe and sound manner and that he will be a changed boy once he passes out of this institution - and we are happy to say that we were more than right in our decision.

What determines and differentiates a preschool education from a regular schooling is that the mind of a toddler works, understands, and functions at a totally different level than kids in the "schooling" age group.  Research shows that children are at their creative best during their preschool days and if nurtured properly, they can make the best out of their lives in future with better decision making and analytical skills than those children who were neglected in the preschooling stage.  In another words, preschooling is similar to nurturing the seed of a plant with the right amount of water and fertilizers in order to get optimum growth and to make sure the roots are firmly grounded in order to stand the plant in good steed during rough weather conditions.  Unfortunately the government is totally looking the other way around and has completely neglected this important area of education.  There are presently no regulations whatsoever for opening and running a playschool and no educational grants to institutions like Kidzee who are doing a great job by investing their own capital and resources.

In fact, we at Ethmos, genuinely believe that the government should not only bring strict but transparent regulation in this area but also provide assistance for starting more such playschools or its branches so that the benefit of this methodology of teaching can reach maximum population at an affordable cost.  The government should also develop a preschool teachers' training programme in order to prepare preschool teachers for our future generations to come.  Since Kidzee is itself a very recognized and reputed brand, the help of such well-established institutions can be taken for developing the overall curriculum as well as its implementation and delivery.

Coming back to my point, I would finally like to personally thank all the teachers and staff members of Kidzee Vesu (Surat) (especially Prateek Sir, Rosie Miss, and Shefali Madam) who have taken all the efforts, pain, and time in order to make sure that my son gets one of the best care and education away from his home.  In fact, I write this article with a hope that one day, say after 15-20 years from now, Aryan and all his friends who are studying with him now, will be reading this article and remember those great people who were there for them during their budding years.  I hope at that time they do acknowledge the great work of these people who laid the foundation of education for them - who taught them about alphabets, numbers, words, sentences, names of things and places, showed them various things and places; taught them how to read, write, eat, and speak; took the effort to mimic things before them in a funny manner so that their small brains can understand and digest a complex subject in its most beautiful simplicity (and believe me, it is no joke to simplify things in a most understandable manner)!

But for the time being – please accept my sincere thanks on everyone’s behalf and on behalf of Ethmos and Gyanarth.

THANK YOU