Page 5 - Banking Finance September 2024

BANK UPDATE

ing clerks, associates and sub-staff) has
declined since at least FY17.
In FY17, the total employee count at
India's SCBs was 13 lakh with 62 per
cent of them officers (around 8 lakh)
and the rest comprising junior staff
(clerks and sub-staff). However, the
Ò»©­ proportion of officers in total staff has
been gradually rising year-on-year. Cut
to FY23, 74 per cent of the employees
are categorised as officers, with the
proportion of clerks down to 26 per
cent.

The RBI, in its recent Currency and Fi-
Fixed deposit losing appeal from young investors nance report, highlights the changing
mix of banking staff in the past de-
Finance minister Nirmala Sitharaman nudged state-run banks to step up de- cade. In FY11, officers and support
posit mobilisation and conduct special drives so that it can keep pace with
staff were at a 50:50 ratio; over the
the growth in loans. Data by SBI Research suggesting that bank deposits, years, this slowly changed and is 74 per
traditionally favoured for their safety and liquidity, are losing their appeal cent -26 per cent in FY23.
among younger investors.
Analysts and bankers note that the use
While deposits remain a secure investment option, their post-tax returns of technology tools for routine tasks
are falling short compared to riskier assets like mutual funds and equities.
like KYC and documentation purposes
Nearly 47% of term deposits are now held by senior citizens, the report is impacting workforce composition,
showed, indicating that the younger population is shifting away from con- with a reduction in junior and middle-
ventional banking avenues. In contrast, the median age of investors in capi- tier job roles and the need for more
tal markets has dropped to 32 years, with approximately 40% of these in- analytical and supervisory senior staff.
vestors being under 30.
Balasundaram Athreya, President,
Manipal Academy of BFSI, said that
Govt nod to Setty as SBI the upper age limit for the SBI's chair- even though overall hiring at private
man position.
Chairman sector banks was robust, the evolution
of core banking systems and front-end
Challa Sreenivasulu Setty was ap-
pointed as the chairman of the State Banks hiring more officers, fintech plays had led to relatively
Bank of India. His tenure will be due fewer clerks and sub-staff slower hiring for junior roles.
to start for three years on or after India's banking sector continues to be
August 28. The Appointments Commit- labour intensive but digital technolo- Up to 4 nominees for bank
tee of the Cabinet approved the deci- gies are changing the composition of
sion. the workforce, more so in nationalised accounts proposed as part

The government also appointed Rana banks. of banking law tweaks
Ashutosh Kumar Singh to take over as Analysis of Reserve Bank of India (RBI) A bill seeking to improve governance
Managing Director (MD) at SBI, after data on employees of Scheduled Com- standards in banks, allowing nomina-
Setty who currently serves in the posi- mercial Banks (SCBs) shows that while tions of up to four persons by an ac-
tion. headcount has been on a steady rise on count holder and ensuring the protec-
Setty will be succeeding current chair- an overall basis, the growth has come tion of depositors and investors has
man Dinesh Khara, whose term ends from hiring staff in the 'officer' cadre been introduced in the Lok Sabha.
on August 28 as he will be turning 63, while the number of juniors (compris- The Banking Laws (Amendment) Bill,

BANKING FINANCE | SEPTEMBER | 2024 | 5