Finance minister Nirmala Sitharaman has called upon public sector banks (PSBs) to rework their human resource policies to ensure employees proficient in local languages are deployed at branches in corresponding regions. The move, she said, would help restore the “human touch” in banking and improve customer
service.
“The only flak which I am unable to defend on behalf of public sector banks, and I am not talking about private banks, is when because of our HR policy, we post people of different mother tongues in different areas.
“I am not blaming the policy, but not a word of the local language is spoken. That little element of touch which is required with your local customers — without them you are not there — you need to have that element come in,” Sitharaman said at SBI’s Banking and Economic Conclave on Thursday.
“I appeal to all banks to make sure your HR policies are such that you are not recruiting for the sake of just numbers. Banks should make sure that every staff posted at a branch would understand his customer and speak the language locally.
“At least if the top management does not speak, the branch level officials should speak. And I would strongly push towards performance appraisal (of an employee) based on his/her efficiency in local language,” the finance minister said.
The FM’s observation comes at a time when there are rising instances where bank staff are either unable or unwilling to communicate with the customers in their local language. In a recent instance back in May in Bangalore, an SBI staff had refused to speak in Kannada, prompting outrage and request for mandatory training of bank staff in local language proficiency.
Canara Bank too has faced criticism and public backlash due to incidents where non-local language speaking employees were unable to assist customers in the local language, primarily in Karnataka. Sitharaman said that while digital private infrastructure can bring in advantages and efficiencies, productivity and profit, banks have lost the “human touch” they earlier had.
“You knew your customers earlier because the person posted there would tell you about the local scenario, who is credit worthy, who is reliable, who is authentic. That’s completely gone. Wouldn’t you want to restore that?” the finance minister said in an interactive session with SBI chairman C.S. Setty. The FM also said that there is a need to simplify the KYC process for bank customers.
“Our paperwork has to be simplified. Of course there is some work going on towards KYC in FSDC. All banks have to sit and talk about it and all regulators have to come on one page. We have to make the process simple. You can’t be putting the onus on the borrower to go on proving and providing documents till death comes,” Sitharaman said.
“If these small things are corrected, you will be one of the most appreciated institutions in the country,” she added.
Setty said that banks have been working towards the process of simplification. “We are working on Project Saral (in SBI) and many of the things that you have been talking about over the years, we are undertaking in this project,” he said.