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Why is the number of clerks in banks falling drastically?

In 2005, clerks and subordinates constituted more than 63 percent of banking employees in scheduled commercial banks; that number fell to nearly 30 percent in 2021.

September 20, 2022 / 05:55 PM IST

The number of clerical employees and subordinates in banks has gone down drastically between 2010 and 2021, while the number of officers has witnessed a sharp spike, shows data published last week by the Reserve Bank of India (RBI) in the Handbook of Statistics on Indian Economy. According to various bankers and trade union leaders, banks are preferring to hire more officers as that is more economical for the lenders.

In 2005, clerks and subordinates constituted more than 63 per cent of banking employees in scheduled commercial banks; that number fell to nearly 30 per cent in 2021. Till 2010, clerks and subordinates formed more than 55 per cent of total banking employees, but thereafter there has been a downward trend.

Why hiring more officers is more economical?

According to various bankers, the pay scales of officers do not go up proportionately with promotion, especially in public sector banks. So, instead of hiring five clerks or subordinates in the pay scale of Rs 30,000, it is beneficial for banks to hire one officer at a little higher salary.

“If you look at any other industry in the private sector, the hikes are much better with promotions. But officers (in banks), as they get promotions, don’t get hikes. The junior ranking individuals (in the banking sector) may appear better paid compared to their contemporaries in other industries. But that is not the case with high-ranking officials,” said a senior banker from the State Bank of India.

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Officers: Easy targets?

Bankers and union leaders believe that banks can pressurise and manipulate officers more than clerks and subordinates. As a result, banks prefer hiring officers to clerks.

“Banks often ask us to stay back late in the evenings or even come on weekends, if needed. Officers can’t deny it. But that won’t be the case with clerical staff,” added a branch manager of Bank of Baroda (BoB), requesting anonymity.

Moreover, the officers are not protected by the Industrial Disputes Act, which renders them more vulnerable. “For officers, there is no Industrial Disputes Act, nor can they resort to taking the help of the labour office in most cases. So, it becomes easier for banks if there are more officers,” said C H Venkatachalam, General Secretary, All India Bank Employees Association.

No recruitment, yet promotions galore

Earlier, the Institute of Banking Personnel Selection (IBPS) used to conduct exams for both clerical and officer posts in banks to fill up large number of vacancies. However, that’s not the case in recent years.

“IBPS is not conducting enough recruitment these days, but promotions have been continuing on regular basis. So, those who were clerks and subordinates for even a few years have been promoted to junior ranking officers. But for the vacancies created following these promotions, no recruitment has been initiated in recent years,” added the banker from BoB.

Is technology to blame?

With digital banking initiatives being widely promoted, clerks are at the receiving end, said sources in the Indian Banks’ Association (IBA). They said that banks are primarily focusing on using technology to replicate the work done by clerks. Thus, in most branches in metropolitan cities, and urban and semi-urban locations, banks are hardly appointing any clerks or subordinates. The situation is not much different in rural areas either.

Will customers suffer due to lesser number of clerical staff?

IBA and several senior bankers pointed out that due to lesser number of clerks in the banking sector, customers of rural banks may get affected.

“Officers can be transferred to any place across India. But clerks and subordinates used to be local people, as they didn’t have the provision of being transferred to faraway locations. Thus, the customers especially from rural India could easily communicate with the clerks, thanks to there being no language divide,” added the source from IBA.

On the contrary, with hardly any clerks in many branches, officers often face a language barrier, resulting in lower efficiency levels. For customers too, that poses a problem.
Pushpita Dey is a banking and finance correspondent.
first published: Sep 20, 2022 05:55 pm
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