Aided by technology, govt banks widen outsourcing

Old-style jobs disappear as attitudes, systems pulled into the future.

Call it a technology transformation. Where are the innumerable tellers, typists, peons and tea vendors that were so characteristic at a public sector bank (PSB)?

Tellers have been replaced by ATMs, the work of peons are being done by computers and for other clerical jobs, including housekeeping and ATM management, there are outsourced employees or contractual workers.

The result is substantial reduction in growth of the work force. While banks have been growing at 20-25 per cent annually, fresh recruitment has been only four-five per cent.

The country’s largest lender, State Bank of India, is planning to optimise the work force in about 80 branches, whereby the job of three clerical staffers could be done by one, and the excess workforce shifted to other centres like Liability Central Processing Centre (LCPC), according to a senior official.

LCPCs at SBI are centralised service centres which specialise in opening accounts, after initial processing at branches. With almost 30 million accounts being opened at SBI each year, several committees are studying if some non-core part of LCPC operations could be outsourced, said a senior official.

“If some part of the work like feeding of the data can be outsourced, the process of account opening will be much faster,” said the executive.

However, bank unions are likely to stiffly oppose additional outsourcing. “As a trade union body, we are opposed to any outsourcing. We are also opposed to outsourcing of part of account opening services at SBI,” said G D Nadaf, officer-employee director.

Some PSBs, on the lines of private sector banks, have already started engaging recovery agents to reduce non-performing assests.

“Some of the activities like marketing and call centres are being outsourced by our bank. Some recovery is also being done through recovery agents, after training,” said S L Bansal, executive director, United Bank of India.

Gradual leeway
According to RBI guidelines, activities which form part of core management functions such as corporate planning, organisation, management and control and decision-making functions cannot be outsourced. So, activities such as marketing and support functions, lead generation and promotional activities and initial contact point verification activities are generally outsourced by banks. Also, document processing, marketing and research, data processing, back-office support services and general administration-related activities are some of the other functions which banks are outsourcing.

“In the last 10 years, recruitment in the banking industry is not more than seven-eight per cent, mostly because of use of technology. We are outsourcing work like marketing and providing leads for opening an account, but all verification and know-your-customer work is being conducted by bank staff only,” said Ramnath Pradeep, chairman and managing director, Corporation Bank.

But several clerical jobs like cheque delivery to clearing houses, which used to be done in-house, are being outsourced to courier companies. ATM maintenance, software development, data centre operations, network administration and maintenance of hardware are some other services being outsourced.

“In the last three years, we have almost doubled in size, but the need for fresh recruitment has been reduced by use of technology. For example, we have installed mechanised cash drop boxes in our banks, which gives photocopy receipts instantly,” said T M Bhasin, chairman and managing director, Indian Bank.