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Public sector banks (PSBs) will need to wring more efficiency out of their operations to catch up with the banking industry’s average in terms of profit per employee and business per employee.
This is underscored by the fact that when it comes to profit per employee (PPE), only 9 out of 26 PSBs surpassed the industry average of Rs 8.1 lakh per employee in 2011-12.
The top five PSBs with above industry average profit per employee are: IDBI Bank (Rs 13.20 lakh), Bank of Baroda (Rs 12 lakh), Corporation Bank (Rs 10.90 lakh), Indian Bank (Rs 9.30 lakh), and Andhra Bank (Rs 9 lakh).
Among the PSBs with below industry average profit per employee are: Central Bank of India (Rs 1.5 lakh), Bank of Maharashtra (Rs 3.1 lakh), Indian Overseas Bank (Rs 3.8 lakh), State Bank of Mysore (Rs 4 lakh), United Bank of India (Rs 4.1 lakh) and State Bank of Travancore (Rs 4.2 lakh). In the case of the business per employee (BPE) parameter, half of the PSBs are either at par or surpassing the industry average of Rs 11.38 crore per employee, according to the Reserve Bank of India data on profile of banks.
The top five banks in terms of BPE are: IDBI Bank (Rs 23.87 crore), Corporation Bank (Rs 17.13 crore), Bank of Baroda (Rs 14.66 crore), Oriental Bank of Commerce (Rs 14.62 crore) and Canara Bank (Rs 13.74 crore).
Among the PSBs with below industry average BPE are: State Bank of India (Rs 7.98 crore), State Bank of Bikaner and Jaipur (Rs 8.27 crore), Central Bank of India (Rs 8.61 crore), State Bank of Mysore (Rs 8.81 crore), and Bank of Maharashtra (Rs 9.67 crore).
PSBs account for almost three-fourth of the banking sector’s deposits and advances in the country.
In a speech in August 2011, RBI Governor D Subbarao had emphasised that more effective and enlightened corporate governance of banks can be a vital avenue for improving banking productivity.
The RBI, in its latest report on profile of Indian banks, has observed that employee productivity in terms of both business per employee and profit per employee in all scheduled commercial banks, including PSBs, private sector banks and foreign banks, at the aggregate level increased continuously in all the financial years during the period 2007-08 to 2011-12.
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