MOHAN BHAKTHA

The short-comings are different for Public and Private Sector Banks. The major problem at Public Sector Banks is the short tenure (1 to 3 years) for which the senior officials hold various positions, which does not allow them enough time to settle down, understand problems, plan for short, medium and long term solutions etc. Add to it lack of specialization. Most of the public sector bankers are generalists which becomes a major handicap when it comes to getting an insight into the health of advances, especially those running in to hundreds/thousands of crores. Third major problem is that they do not have performance related incentive for their main business i.e., banking, lending, health of loan accounts etc., whereas they have lucrative incentives for cross selling of Insurance and Mutual Funds. At private sector banks, from the recent cases which have come to light, the problem is of adopting short cuts to boost short term performance at the cost of working to make the organisation robust. This is facilitated by the workforce who are driven by Pay, Perks and Promotion which makes them blind to what is happening around them. These are generalizations and there are certainly exceptions.