Finance ministry pulls up public-sector banks over staff misconduct

Ministry asks lenders to strengthen handling customer grievances following several incidents

The Union Ministry of Finance has asked public-sector banks (PSBs) to strengthen handling customer grievances following several incidents of alleged misconduct by the bank staff, a senior government official said. 

“Department of Financial Services (DFS) Secretary M Nagaraju has told PSB chiefs to strictly adhere to the established guidelines governing employee conduct,” the official added. 

The source further added the secretary also asked banks to regularly review the performance of branch heads. 

“These reviews will include assessments of how well a branch is maintained, its cleanliness, and how staff members interact with customers,” the official noted. 

Recently, a video from a State Bank of India (SBI) branch in Karnataka has gone viral, intensifying the ongoing language debate in the state. 

In the clip, a customer is seen asking a bank official to talk in Kannada, to which the employee responds that she won’t use the regional language. The exchange sparked public outrage, prompting the official to release an apology video. 

“State Bank of India maintains a policy of zero tolerance towards any beh­aviour that adversely affects the sentiments of our customers. We remain steadfast in our commitment to ensurin­g respectful and dignified conduct tow­­ards all citizens,” said SBI in a statement. 

Recently, Nagaraju, who had made surprise visits to branches of PSBs in New Delhi, was in for a shock. He was made to wait for an hour to meet the manager in one bank, and in some other PSB branches, he found the behaviour of officials “unsatisfactory”.  The surprise checks were meant to observe how the employees of PSBs interacted with customers and where they lagged compared to private banks. 

The source added that during the inspection, the secretary found bad behaviour among the staff.  

“There should be a way to say ‘no’ to anything. Bank employees need to be a bit generous towards customers,” added the source. 

Earlier, Business Standard reported that to improve frontline banking service and win customer trust, major PSBs were launching programmes in training soft skills for employees, with an innovative layer of artificial intelligence to simulate real-world interaction.  This move comes against the backdrop of stagnating deposit growth and rising concern in the ministry over inconsistent customer service, according to the official. 

A senior banker said: “PSBs have begun strengthening customer engagement. For this, they are increasingly leveraging AI and other tools.” 

Ashok Chandra, managing director and chief executive officer, Punjab National Bank, said:  “Customer service is our priority and we are deeply focused on improving it. It is becoming the central theme of our efforts. As part of this, we’ve introduced a quick response-based feedback system for customers to rate the service provided by our employees. After completing a transaction, customers will receive a prompt to provide feedback on the service they received, which is integrated with our head office system for real-time tracking and evaluation.” 

In FY24, complaints against PSBs received by the Office of the Reserve Bank of India Ombudsman were among the highest at 38.32 per cent. This is against 34.39 per cent in private banks. 

Addressing gap

  -  DFS Secretary M Nagaraju directed banks to regularly review the performance of branch heads

  -  Nagaraju, who recently made surprise visits to several PSBs, had to wait an hour to meet the manager in one bank

  -  In some other branches he found the behavior of officials "unsatisfactory" 

  -  PSBs are planning to launch soft skills training programs for employees