Consumer Issues
Post office to launch mobile remittance scheme

In the first phase the mobile remittance scheme will be implemented in selected states like Kerala, Bihar, New Delhi and Punjab

Kottayam: The Postal Department is launching an instant money remittance scheme, mobile remittance scheme, in tie-up with the BSNL infrastructure by next month, Chief Postmaster General (Kerala Circle) Sobha Koshy said, reports PTI.

In the first phase the scheme will be implemented in selected states like Kerala, Bihar, New Delhi and Punjab, Koshy told reporters after releasing a special postal cover in connection with the ruby jubilee celebrations of Kottayam Press Club.

In Kerala the scheme will be implemented in selected 30 post offices in Idukki, Aluva and Pathanamthitta. As per the scheme a person can send money through the post office which will send a message to the other post office about the amount to be given to the other person, she said.

Koshy said the process of computerising the entire postal network in the country, numbering 1.55 lakh post offices, was going on. In Kerala out of 1507 post offices, except 29 post offices rest are computerised.


Poor human resource management practices in Indian public sector could lead to a serious setback

 The absence of talent in the government and public sector is the product of a deliberate neglect of human resources issues. Dodging real issues could take us back to pre-reform days 

The Reserve Bank of India (RBI) plans to rope in outside consultants to overhaul its human resource (HR) practices, a move that would affect its nearly 18,000 employees. It is reported that the central bank will form a panel of up to six independent professional firms to help the RBI in framing, implementing and delivering integrated HR solutions in the areas of HR policies, processes and systems, among others.

The empanelled consultants would advise the central bank on matters like hiring, salaries, training, performance appraisal, retention and succession plans, the banking regulator said. The panel will help the RBI in areas like strategic HR planning and advisory services; evaluation and assessment system; HR and management practices audits; beside others.

This is a step in the right direction. Recent years saw several flaws in HR management in the central bank. Ad hoc recruitment of executive interns without planning their future deployment or absorption, succumbing to pressure on promotion policies, not being able to convince the Government of India (GOI) on the need to implement competitive remuneration packages for recruiting and retaining efficient officers, failure to decide on upgrading of retirement benefits at least on par with GOI are just some examples. When it comes to infusing professionalism in specialized areas like supervision, forex and debt management the RBI is facing several constraints, many of them emanating from its failure to argue with North Block as the finance ministry shows an attitude akin to master-servant relationship.

Now that RBI has woken up, we may expect other statutory bodies and public sector organisations followed by the GOI to follow suit and think of an overhaul in their Human Resources Management and Development (HRMD) practices.

In this context, a look at the relevance of the Indian public sector and the neglect the sector is subjected to especially since the LPG (Liberalisation-Privatisation-Globalisation ) days, circa 1991 may help us stop, look and proceed further to develop the India growth story further.

Our country, since independence—or more appropriately—right from the First Five Year Plan, has been giving due importance for a vibrant and growing public sector in the nation’s economic development. In fact, certain sectors like defence production, Railways, Post and Telegraph were almost monopolized by the public sector till a change in policy became necessary post-LPG. The policy shift has thrown up many challenges before the government and the organizations in the public sector.

Both Jawaharlal Nehru and Indira Gandhi clearly understood the role of public sector in the Indian scenario. Establishment of core industries in the public sector and other measures up to nationalization of major banks were well thought out steps, taking into account the needs of a nation with an abundance of resources waiting to be managed and the urgency in ensuring fast economic development, distributive justice, employment generation and outreach to the rural areas. The two leaders saw in public sector organizations the capability to function efficiently in a democratic dispensation, guided by government policy, especially in regard to social responsibility and reach out to areas, organizations guided only by profit motive would normally refuse to penetrate.

Actually, the private-public sector divide in regard to meeting social responsibility obligations/commitments and a discriminatory approach between the two sectors, when it comes to government policy support is a legacy of the British Raj. Once it is accepted that the resources of the country are the property of the people and irrespective of ownership (whether government or private individuals/groups/families/organisations), all are handling public funds/resources in a trusteeship sense, this divide can be bridged to a great extent.

Presently, in the above background, the Indian public sector is ailing from lack of autonomy, indecent competition arising from a wrong understanding of the unique position of our country and irrelevant comparisons. Unique position because, our per capita geographical area, availability of resources, literacy rate, development needs, system of governance  and so on are not amenable to comparison with most of the developed and developing countries of the world. Day in and day out India is given a rank or rating among the assortment of nations in the world, many of them together can be accommodated in one of the states of India.

We are persuaded to believe that corruption and inefficiency exist in government and public sector only. In fact there is nothing further than truth than this belief. The pre-IT success stories of the Indian Railways, Posts & Telegraph, oil sector, space research, defence production and several other sectors which functioned efficiently and where corrupt practices were brought to light quickly and remedial action initiated departmentally are easily and conveniently forgotten. Of course, now, one gets an impression that there is a vested interest working in the private sector to keep government corrupt and public sector inefficient. If human resources related issues in the government and public sector are given the attention they deserve, many of the present problems can be solved. A brief discussion of the HR-related problems in government and public sector follows.

The absence of talent in the government and public sector is the product of a deliberate neglect of HR-related issues by the government. The ageing top level in the government and public sector is a serious issue. In the present context when performance of the government and institutions in public and private sectors is being watched by the world and judged almost online, human resources development (HRD) at the top across sectors should become a national priority. As a fire-fighting measure, there is a need for a comprehensive look at manpower planning and deployment of available expertise among institutions across private and public sectors and related HRD issues which have to be handled without further loss of time.

More than a year back, the RBI governor made a plea for a level playing field for PSU banks with enough freedom to hire executives and employees on competitive terms. This should have been seen in a wider perspective. Recently, the RBI too opted for recruiting short-term (for three years) executive interns on contract basis. The RBI has tried out most of the options like accelerated promotion, foreign postings, deputation to subsidiaries, assignment to higher quality training programme and paid holiday with family for its employees. As large disparities between the pay and perks in institutions with similar responsibilities across public/private sectors had not been appropriately addressed, the RBI’s new hiring scheme also did not attract talent.

The government should not further delay a revamp of the policy relating to recruitment, training, placement and compensation strategies across government, public and private sectors. A long-term solution may  have to be found for HR-related problems, including inability to hire experts at market related compensation (this is applicable up to the position of secretary/CEO in government and public sector), skills becoming obsolete in short periods, employees’ reluctance to change and demands from trade unions emanating from job security concerns. There may not be a “fit-for-all” remedy, as the issues are diverse and sometimes sector/institution-specific.

The government and public sector organizations may have to consider how best the “Cost to Company” (C to C) principles can be integrated into their existing recruitment, training, placement and career progression policies. This may involve convincing the existing employees that the changes will only improve the working results of the government departments and organizations they belong to and they will get opportunity to share the benefits and new job opportunities and so long as they are prepared to learn new things/upgrade their skills the infusion of ‘experts’ will not eat into their career progression opportunities. Inter-mobility of executives at higher levels among comparable departments of government and public and private sector organizations should be possible, on transparent norms and strictly based on merits. Changes may have to come first in the recruitment and training procedures for IAS and relates services, management trainees in public/private sector undertakings including probationary officers in public sector banks (PSBs). Recent revamping of Tata Administrative Service gives enough food for thought for thinking on these lines. Specialized services like one for banking/financial sector could be evolved for institutions including those in the private sector and all regulatory bodies in the financial sector.

A transparent guidance for a remuneration package based on the paying capacity/need for skills for different sectors and ensuring social security should come from the government without always worrying about what will be the impact on cabinet secretary’s salary or trade union demands. If the government secretary deserves a higher salary, the government should not raise budgetary concerns for not paying it. Instead, merger of some departments and utilizing the surplus manpower for new job opportunities should be a wiser option.

Time is opportune for both private and public sector organizations to have some introspection on their HR practices right from recruitment at the lowest level to the selection of CEOs, remuneration packages, training facilities and social security measures for their employees. While organizations in the private sector may have to review the optimum pressure they can put on their executives and managers, government and public sector counterparts may dispassionately examine and modify their remuneration packages to ensure attracting and retaining competitive talent in the present market scenario. Let us not forget that the civil services, executives and staff of public/private sector undertakings have to supplement the skills of the increasing number of political masters who were not as fortunate to get trained or groomed. The nation is immensely dependent on them for carrying out the development agenda on hand.

Till, perhaps ten years back, employers could depend on a growing population of educated unemployed from which they could hire and fire candidates on their terms. The position has changed with the opening up of the economy and sooner we realize it and act, the better. Dodging real issues could take us back to pre-reform days.

(The writer is former general manager, Reserve bank of India. He can be contacted at [email protected].)




4 years ago

I’m so glad you enjoyed the topic and the debates this week, and thank you again for the great discussion board topic. I’m really looking forward to the debate that sparks!

Chandra Bhan Gupta

4 years ago

HR Policy in RBI is changing frequently and many talented officers got stuck in timely promotion to them. Many DR officers previously got promotion to gr. C on completion of 3 years service and now they get it after 7 years i.e. delayed future promotion due to bad HR Policy and due to their faults.

Recruitment at two levels Officer Gr. A and Gr. B in class I service with around two increments difference at start and maximum scale in the scale is it self is a joke. When many direct officer grade A officers took around 20 years for promotion to grade B officer post. Again total HRM failure.

My suggestion is that Officer Class I service recruitment should be only at one level as done in Group A services of the central government. Remaining grade promotions to be on seniority and merit basis on the line of UPSC formula.

My suggestion is that Officer Class I service to have only one running scale with grade pay separate for determining seniority as per 6 CPC.

Outside HR Expert may not be equipped with the HR Strategy concepts adopted by RBI Management and Think Tank which I gathered after personal working experience of 26 years officer service as ASO (DR) in 1980, Promotion to P &SO Gr B in 2000 and retired in 2007 as Gr C (PP).

All have forgotten Justice Nain Cadre Review Committee Recommendations and Formulae and various sequence of events in the area of promotions and Performance Appraisals.


4 years ago

As an employee of a PSB, i really dont understand why there exists so many vacancies when the country is filled with talents. There are crores of young fresh blood looking for suitable jobs. We should start recruiting right candidate for the right post, say a clerk should have a minimum edu qualification like B.Com, BBM, BBA, BA(economics), etc who have enough english fluency and computer&accounting knowledge. This is how we can set good standard, not by recruiting BA(English) or BSc(Chemistry) which is irrelevant to the work.

Manojikumar.R,MBA,CS(Professional), NCMP Level 1,
Asst. Mgr,
Vijaya Bank


5 years ago

Neither lack of talent or HR resource is the real cause of public sector efficiency lagging, the real cause is a systematic politicization by over taking management from the public servants in the guise of obtaining majority in parliament assured at the cost of national interest.



In Reply to KhandadhiBalakrishna 5 years ago

Inefficiency is evenly distributed in private and public sector. The perceptible better front desk performance in private sector is only because that sector has an option to select areas of work. There are efficient organisations in public sector, which as you say are being destroyed, may be consciously, to help private sector. If you need one example in financial sector, UTI is there for all to see. First, its Unit 64 Scheme was destroyed. Now whatever is left of UTI is being weakened by keeping the top-most post vacant for about 18 months.M G Warrier


5 years ago

This is truly a sorry state of affairs. This article brings out clearly that people management issues can no more be left to any deptt, by whatsoever name it exists but need attention at the very top. The temptation to remain comfortable with the legacy systems in HR needs to be got rid of and a very focussed, modern and professional approach to HR is the need of the hour. In fact, it should have happened yesterday.

With access to modern information technology, it should all the more be possible to transit smoothly from the present disappointing state of affairs to one where the best of the brains is hired, nurtured, rewarded and retained by the RBI and the PSBs.

Let this article be an eye opener for ACTION.

V G Subramanian, Former General Manager, Bank of Baroda, Mumbai
31st July, 2012

RBI needs to come out clean on NPAs

If NPAs are not curbed effectively, it will not be long before we in India head the Greek route. The banks should not stop short of opting for strong coercive proceedings under the securitization laws rather than yield to the mirage of CDR

In the west, post-Lehman brothers has brought about new financial jargons like bailout for stressed assets in the USA, here in India they are termed non-performing assets (NPAs). Both simply stand for bad or irrecoverable loans/debts by whatever name they are called.

Moneylife has just carried a cover page report on Loans going bad by a veteran banking analyst and also a series by a former banker. I now add to them from another angle arising out of my over four decades as a central statutory auditor on the Reserve Bank of India (RBI) panel auditing major banks both domestic and foreign.

It needs to be pointed out that no bank loan goes bad overnight. It takes place over a time. Some of them commence at the sanction and disbursement stages, to begin with the inadequately or badly appraised loans or lines of credits approved by the very top management and pushed up-down to the disbursing branches to proceed without proper documentation, securities and guarantees; just rushed through. When they do go sour initially and bad later, the entire inadequacies crop up but then it is too late to enforce recovery proceedings effectively. This gives the defaulting borrowers an upper hand.


Next are the laxities in monitoring at the branch level—the incipient bad borrowings arise more out of the officials not heeding and acting promptly on the red signals leading to irregularities like the borrowers exceeding drawing powers by not submitting inventory or debtors security statements in time, ultimately resulting in the advances exceeding the sanctioned limits to constant overdrawing, resorting to frequent TODs, bouncing of cheques for want of funds. If only the branch had reported to the controlling authorities the irregularity instead of seeking ratification of allowing it to happen could the warning signals of impending NPA have been resulted by nipping it in the bud by putting an effective brake. Branches tend to take operational irregularities lightly or act routinely only to wake up when the outstandings mount when it is too late.

The RBI panel under its executive director, B Mahapatra while observing that restructuring amounts to an “event of impairment” whether or not its asset classification undergoes a downgrade, has rightly recommended that all loans that are subjected to restructuring should necessarily be classified NPAs as they are in fact sub-standard and not standard which by any stretch of imagination they are not. More particularly when restructuring requires the banks to take a hit by granting concessions like substantial reductions in interest rates, moratorium or elongation of repayment schedule, part waiver of principal and/or interest or converting debt into equity at inflated values a la Kingfisher. There is absolutely no valid justification to make any such distinction that only obfuscates the underlying problem of mounting bad debts! When internationally accepted accounting standards treat restructured advances as impaired they is no reason for Indian banking to deviate from the prudential accounting practices primarily from the transparency perspective.

The RBI’s suggestion of a two-year “regulatory forbearance” for withdrawing the standard classification benefits needs an urgent recall. Notwithstanding this, the banks need to explicitly start recognizing these loans as NPAs as they have suffered considerable diminution in the realizable fair values of the securities assigned to cover them. They have necessarily to be recognized and also provided for entirely in the year of occurrence. It is certainly not correct to defer it to future years when the profits of subsequent years take the hit. The RBI shouldn’t venture into the realm of prudent and accepted international accounting practices by suggesting such deferrals.

The Bank Statutory Auditors, in helping out the bank managements to window-dress their annual accounts to overstate the profits for the year, have, in my considered opinion, wrongly misinterpreted the RBI guidance for deferrals. This is equally applicable to the RBI guidelines for recognizing and providing for the accrued gratuity and pension liability. The bank auditors are under wrong impression that they can get away by merely stating in their auditors’ report—“Without qualifying our opinion/report, we draw attention to Note...” This is no qualification as it does not explicitly state the liability did and does exist on the date of the balance sheet and the not providing for it impacts the profits for the current year. The RBI’s advisory in merely advising them to defer it over a period of time does not absolve them from providing for and disclosing the liability subsisting and also existing. The RBI as the banking regulator and the ICAI as the accounting regulator ought to review this unhealthy practice of window-dressing that only result in overstating the profits. The regulatory forbearance certainly cannot exceed its brief!               

In the two years between March 2009 and March 2011, gross NPAs of our banks shot up from around Rs68,000 crore to Rs94,000 crore. By bringing in the so-called restructuring they have not been wrongly classified as standard—they would have soared from just over Rs60,000 crore to almost Rs1,07,000 crore. The numbers for end-March 2012 are expected to touch a whopping Rs 2,06,500 crore by the banking industry’s restructuring cell.

The Sick Industrial Companies Act (SICA) has been on the statute books for long.  Companies are invariably rendered sick by the promoters who are always hale and hearty. The bankers deal with them with kid gloves by hesitating to make demands on large industrial chronic defaulters. The Securitization & Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2005 (SARAESI), empowers lending banks to seize mortgaged assets of recalcitrant borrowers to realise the best prices without having to resort to court sanction. It is found that it is most commonly applied to small time borrowers like those who have defaulted on EMIs for home loans, vehicles loans, small  time traders that it tantamounts to using a sledge hammer to swat a fly and not recover from the large chronic defaulters.

The big ticket defaulters manage to keep out bank attachment orders by obtaining court stay orders. High profile borrowers like Kingfisher just apply any tactics to keep lending banks at bay. This is simply because the banks and the RBI are found to be speaking with forked tongues. They blow hot and cold at the same time, all the time they are caught pussyfooting—a case of willing-to-push-but-afraid-to-hurt attitude of not touching the big guns, but attaching small owners or traders. Proving right the good old Hindi adage—Hathi janey dega, magar doom pakadke ke baitega—translated letting the elephant pass through only to cling on to its tail.

The standard of toughness of recovery proceedings are strong with small retail borrowers where the flat and vehicle are attached with ease. The bank attitude generally is in keeping with the refrain that when one small entity borrows a couple of lakhs from a bank, the borrower will be in trouble, but when one big ticket borrows crores, it is the bank which is in trouble as the banks  resort to molly coddle the big time borrowers to collect their dues.

To minimize NPAs the RBI to direct the banks to put in place real tough measures of going for the defaulters’ jugular. Insist on personal guarantees and call upon the promoter-directors of public companies also to sign personal guarantees, as is done with private unlisted entities. This is because the promoter clan takes the company’s stakeholders and bankers for a ride after collecting money from initial public offers (IPOs). They should be required to bring in margin money for the lines of credit in hard cash and not by pledging shares of group companies and/or providing their corporate guarantees that are equally dud. They should be asked to cough up not less than 25% of the value of the diminution in the value of securities and/or 10% of the sanctioned limits before even considering any reschedulement in the rescue act. The end use of the borrowed money has to be strictly monitored to ensure there is no misuse thereafter.

The rising NPAs call for drastic strong arm twisting corrective action. The RBI should do well to call upon all banks to furnish a listing of their Top 100 defaulters with a brief on the ages, causes and steps initiated to effect recoveries. The banks and the RBI should make available the listing on their websites along with the progress report on the reduction or otherwise. Most of the defaulters will be found to be big names with strong pull right up to the ministry of finance (MOF) and capable of pulling all strings to keep action at bay. The banks should not stop short of opting for strong coercive proceedings under the securitization laws rather than yield to the mirage of CDR.

If NPAs are not curbed effectively, it will not be long before we in India head the Greek route. The MOF, now under the PM has necessarily to leave the micromanagement of the banking sector to the RBI.

Best assign this task to Dr YV Reddy—the tough acting former RBI governor!

(Nagesh Kini is a Mumbai-based chartered accountant turned activist.)



Girish Pai

5 years ago

Fabulous article.Right into the details.

We need YV Reddy back. All the spineless folks around are just ruining the economy.

Reddy saved us during 2008 crisis and post his tenure, its all for us to see.

Huge Fiscal Deficit and low growth coupled with lack of governance.


5 years ago

Excellent article. The top 100 defaulters list should be published in public domain as this defaulters have taken away public money

Ramesh Poapt

5 years ago

Excellent!Banks adopt window dressing of deposits and under reporting NPAs in a big way,is open secret now!RBI has not free hand.YV Reddy deserves credit for saving India from adverse global meltdown shocks!Though he was also not fully allowed by ex FM...hence Guv had to quit.RBI is always under pressure from Govt/industry lobby/chambers to frame the rate/policy which is short term ineffectvie medicine aka rate cut and reserve requirements of the banks.CMD of SBI openly pursues that.Such things are like uncurable cancer!!May God save banks, PSUs in particular.Pvt banks are far smarter...


5 years ago

You are absolutely correct. Only one thing I would like to add is that Dr Y V Reddy should be made the finance minister.


nagesh kini

In Reply to polyvin 5 years ago

It'll surely be a great day for India if Dr. Reddy is assigned the MOF. But up there the one who is no-nonsense has no say only yes-men!
We are in dire need of someone radical to pull us out of the mess that Pranobda under the benign eye of Man Mohan has landed India into.Sooner the better.
Before we go the PIGS - Portugese, Italy, Greece and Spanish way! God help us!

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