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WFH to WFA: How practical is SBI boss Rajnish Kumar’s idea?

The idea isn’t feasible for a bank of SBI’s size and reach, except in certain functions like administrative work, human resources or some IT functions. Moving out activities like loan proposals and financial transactions isn’t possible and could even be risky.

June 23, 2020 / 09:23 AM IST
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A statement by State Bank of India (SBI) Chairman Rajnish Kumar in bank’s annual report caught the attention of current and former employees over the weekend.

In the 2019-20 annual report, Kumar said, “With global acceptability of Work-from-Home (WFH) arrangements, the bank is in the process of upgrading its existing WFH policy to Work from Anywhere (WFA). Productivity tools and technology are already in place to perform administrative work remotely.”

Although he specifically mentioned ‘administrative work’, the message that went out was that SBI was planning to shift its general functions outside office premises.

Some rejoiced—thinking about the prospects of having the luxury to work from home and avoid long travel hours, while some wondered how it will pan out in the banking business.

Kumar’s logic was that WFA would reduce commute time, and, hence, ensure better services and better work-life balance. “This is expected to drive down the operational cost for the bank, besides ensuring better motivation and productivity for staff members,” the SBI Chairman said.

How practical is the idea?

But can a banking behemoth, which has about 2.5 lakh employees and 24,000 branches across different states, including far-flung rural areas where people are still taking baby steps into the world of formal banking, successfully migrate to WFH. And, if yes, what functions can be taken out of office?

 “A part of the work, particularly administrative and some other jobs, can be shifted to the WFH format,” Naresh Malhotra, a former senior SBI official, told Moneycontrol.

“Quite a bit of IT work also can be deployed out of office. Overall, my hunch is around 25-30 per cent of the workforce can be given WFH option,” Malhotra, who has spent over three decades in the bank, both in India and abroad, said.

Moneycontrol also spoke to at least half a dozen other current and former employees, and their answers broadly reflected the following:

The idea isn’t feasible for a bank of SBI’s size and reach, except in certain functions like administrative work, human resources or some IT functions. Moving out activities like loan proposals and financial transactions isn’t possible and could even be risky.

What does a bank do?

In the most basic terms, a bank’s function is to mobilise deposits and give loans. However, if one looks a bit beyond this, multiple roles emerge: processing loan applications, withdrawals and transfers, cheque/demand draft processing, accepting deposits, giving guarantees, recovery of loan amount, locker facilities, treasury functions, value-added products (insurance, mutual funds and other investment products) and, in the case of PSBs, acting as vehicles for the rollout of government’s populist schemes, are all part of their functions.

According to bankers, it is critical to operate a majority of these functions from the branches. Only those that don’t require real-time supervision and not considered high-risk are the exceptions.

“A loud thinking, don’t read too much into it”

Another official, who takes care of a major business vertical in SBI, said WFA is only an idea in the annual report  and a “loud thinking” by the Chairman and nothing is formal yet.

“I’m not sure how will it work. Anyway, there are no formal communication as such, may be some discussions,” the official said, requesting not to be named.

Another employee with a PSU bank, who too didn’t want to be identified, said: “WFH works for administrative work and most of us takes files homes to prepare various reports. As far as financial services are concerned, it is not feasible.”

Already, banks use alternative channels such as ATMs, Banking Correspondents (agents of banks authorised to collect deposits and give small loans). Banks also use digital channels such as internet/mobile banking and UPIs for smaller transactions. But, for high value transactions, customers still prefer to visit bank branches,” said the banker.

Rural customers love brick-and-mortar branches

WFA could be a problem in rural areas where internet connectivity is problematic and customers prefer to visit branches, another banker said.

“You also need to look at the profile of customers. In rural branches, still more than 90 per cent transactions happen at brick-and-mortar branches, unlike in metros where only 30-40 per cent customers visit branches,” said the banker.

Ashvin Parekh, managing partner, Ashvin Parekh Advisory Services, a consultancy firm, said: “There is some merit in looking at Rajnish Kumar’s plan. SBI seems to have taken the idea from the RBI, which successfully tried the work from outside option by constituting a team of 150 officers. It is a good concept for SBI as well but for an organisation of 24,000 branches, this needs more planning. With good internet connectivity and access to controls, it is an idea worth experimenting.”

After COVID-19 was declared a pandemic, the RBI had shifted about 150 officers to an outside location to work in quarantine so that the critical functions of the RBI won’t be affected. The central bank provided machinery and other facilities for these officers to work flawlessly.

Will WFH/WFA work for India’s largest bank? Well, work is in progress, let’s wait and see.

Dinesh Unnikrishnan
first published: Jun 23, 2020 08:55 am

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