After spoiling banks by incentive oriented
policies , RBI is now planning to ban incentive on sale of insurance product
sale and very soon they will realize how incentive on performance of
various jobs in banks offered by bank management have damaged work culture and
they will plan to put ban on that too.
It is observed that top bank officials are awarded with Free Singapore trip, Europe trio or Bangkok or Malasia and free leave when they achieve target fixed for non-interest income.It is also found that in most of the cases such officers fail to achieve target for interest income because of rise in Non Performing Assets (NPA ). Similarly Branch Head or credit officials put pressure on good borrowers of the branch to buy insurance policies and mutual funds or blackmail with bad borrowers for the same so that they achieve target for non interest income and become eligible for various incentives offered by insurance companies.On the contrary volume of NPA in these branches goes on increasing month after month. Advances sanctioned by these clever officials goes bad in a year or two and even old advances goes bad because of negligent monitoring and negligent servicing of existing customers.Bank officials bargain with customers on selling of non banking products when they decide to sanction a credit facility or enhance the existing credit facility. Due to such ill-motivated lending , banks have to incur huge losses and face erosion in profitability when existing loan accounts become non-productive as per RBI norms for income recognition.
It is observed that top bank officials are awarded with Free Singapore trip, Europe trio or Bangkok or Malasia and free leave when they achieve target fixed for non-interest income.It is also found that in most of the cases such officers fail to achieve target for interest income because of rise in Non Performing Assets (NPA ). Similarly Branch Head or credit officials put pressure on good borrowers of the branch to buy insurance policies and mutual funds or blackmail with bad borrowers for the same so that they achieve target for non interest income and become eligible for various incentives offered by insurance companies.On the contrary volume of NPA in these branches goes on increasing month after month. Advances sanctioned by these clever officials goes bad in a year or two and even old advances goes bad because of negligent monitoring and negligent servicing of existing customers.Bank officials bargain with customers on selling of non banking products when they decide to sanction a credit facility or enhance the existing credit facility. Due to such ill-motivated lending , banks have to incur huge losses and face erosion in profitability when existing loan accounts become non-productive as per RBI norms for income recognition.
In India planning is the best but worst is
its execution. Policy to motivate bank staff appears very much attractive, but
in fact it is killer pill and creates negativity in real performers .top
officials of the Bank themselves earn incentive through window dressing in
deposits, advances and profits and similarly they promote window dressing
at branches to support their flatterers and sycophants.As soon as an organisation formulate a incentive orientation policy , corrupt officials discover to exploit such schemes by hook or by crook. Officials seldom take care of future interest of the organisation when they become blind and greedy for personal gain.Such bad officials get immediate promotion even though they have caused bigger loss to the bank.A clever officers earn a few thousands or a few lacs of rupees as commission on insurance products sold by them but cause loss amounting to crores of rupees through their ill-motivated lending. And such officers are even picked up in promotion process bypassing honest performers.
Similarly promotion policies framed in
banks are said to be merit oriented but in fact it is framed in such a way that
it becomes flattery oriented and bribery motivated. Despite all good points in
all parameters of promotion policies, an officer is picked up in interview for
promotion to higher scale only if he or she has backing and recommendation of
some top ranked officer or some powerful person from Government departments and
ministry of various departments.
This is why good performers have become
silent spectators of 'Draupdi Chirharan' and stopped taking part in incentive
process and promotion processes offered by bank management unless and until he
or she has the blessing of some top officials.
Dependency of flatterers in banks by top
ranked officials and ministers and blind faith on unnatural target oriented
management have resulted in abnormal rise in bad debts and rise in losses
arising due to frauds in bank and it looks ridiculous when the clever top
officials blame global recession , interest rate and natural calamity for
growing sickness in bank.
I however appreciate the plan of RBI to
ban incentive for bank staff selling insurance products and very much hopeful
that RBI will soon realize that freedom given to bank to earn from
non banking products like insurance and mutual funds have only badly affected
the health of bank and for this non other than so called reformers are
accountable and responsible.
It is open secret that Bank officials in
greed of earning petty amount of incentive have failed to protect the interest
of banks fund amounting to billion and billion of rupees. They earn a few crore
of rupees as commission on sale of non banking products but cause loss hundreds
of crores of rupees by ignoring the pre-sanction , post disbursement and
monitoring part of credit sanctioned by them which results in finance
to unscrupulous borrowers and ultimate write off of loan or
sacrifice of bank's fund in compromise settlements.
'Penny wise and pound foolish ' is the
most suitable proverb for these so called prudent and clever bankers of modern
era.
Following is the views expressed by one of
facebook friends named T K vidhhyasagar which speaks of ground reality to some
extent.
TODAY AGAIN I WANT TO
SHARE MY VIEWS WITH YOU AS I CANNOT STOP FLOW OF MY EMOTIONS . I FEEL BANKS ARE
RUINED BY COMMISSION OR INCENTIVE BASED CROSS SELLING , LIKE LIFE INSURANCE ,
MUTUAL FUNDS, DEMAT ACCCOUNTS, GENERAL INSURANCE . IN THESE DAY I FEEL BANKING
ARE EVERYTHING EXCEPT BANKING . SENIOR MANAGER SCALE IV AND V ARE BUSY IN CROSS
SELLING . THEY ARE MORE INTERESTED IN SELLING INSURANCE THAN LOANS . IN SOME
CASES I HAVE SEEN THE CUSTOMER REFUSED TO BUY LOAN PRODUCT BECAUSE MANAGER
WANTS TO FORCEFULLY SELL INSURANCE OR MUTUAL PRODUCTS TO THEM . IN THE RBO's OF
MOST OF THE BANKS THE MANAGER POSTED THERE UNNECESSRY PRESSURIZE THE BRANCH
STAFF , THREAT THEM , TRANSFER THEM , SO I HAVE SEEN IN LIFE INSURANCE MOST THE
MDRT's(MILLION DOLLAR ROUND TABLE CONFERENCE ) ARE SCALE IV OR SENIOR MANAGER
POST IN ADMIN OFFICER OR RBO . THIS SHOULD BE PREVENTED . THIS INCREASE
CORRUPTION . BANKS SHOULD BE VERY CAREFUL ABOUT THE OFFICERS WHO ARE POSTED IN
ADMIN OR RBO OR ZONAL OFFICES .BANKS SHOULD BE TIGHT CONTROL OVER THE BEHAVIOR
OF THEIR MANAGER WITH STAFF PEOPLE . I STRONGLY BELIEVE THAT A GOOD MANAGER
ALWAYS LOVES HIS STAFF LIKE A FAMILY AND A CORRUPT MANAGER ALWAYS TRIES TO
THREAT HIS STAFF , SCOLDS THEM , DISCOURAGES THEM , BECAUSE HE HAS NOTHING TO
DO WITH BANK. HE ONLY LOVES MONEY FROM CORRUPTION , BANKS SHOULD BE STRICTER
NORMS FOR CORRUPT PERSONS, THEY SHOULD IMMEDIATELY REMOVED FROM SERVICE OR ALL
THE BANK WORK SHOULD BE SNATCHED FROM THEM . IF AT THIS TIME GOVT HAS NOT TAKEN
NOTE ON CORRUPTION IN BANKS , THESE GREAT INSTITUTION WILL BE IN TROUBLE IN
COMING TIME
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