May 15, 2022

Casualisation of Bank Jobs Leading to Exploitation

K V George

SERVICE conditions of bank employees in the country were first codified in the Sastry Award at the industry level in 1952 and subsequently amended in the Desai Award in 1958. The era of bilateral discussions commenced in 1966. The first bipartite settlement was arrived on October 19, 1966, between the Indian Banks’ Association (IBA) and trade unions of bank employees. The latest in the series, the 11th bipartite settlement, was signed on November 11, 2020, with retrospective effect from November 1, 2017. This settlement will expire on October 31, 2022.

According to the abovementioned awards and settlements, there is no provision for casualisation or outsourcing of bank jobs. Temporary employees can be engaged subject to certain conditions for certain specified purposes only. Further, in Clause 31(h) of the 8th bipartite settlement on June 8, 2005, outsourcing of certain sophisticated bank jobs is provided only if existing employees cannot be retrained and reskilled to perform them. 

A handful of new generation hi-tech banks were inaugurated in the mid-1990s by the then UPA government led by prime minister Manmohan Singh, with ICICI Bank, HDFC Bank, Global Trust Bank, Centurion Bank and IndusInd Bank being among the firsts. From the very beginning, employees of the new generation of banks had no defined service conditions as existed in the banking industry. They were not covered by the Sastry and Desai Industrial Awards or bipartite settlements. They hired employees from within the banking industry and outside, but on different terms and conditions for different employees. They named it “talent hunt”. They justified undefined service conditions as a novel mode of recognition of talent. 

In 2010, the A K Khandelwal Committee recommended a new human resource policy for all banks, including public sector ones. The committee found that in the changed scenario, competitive examination and interview will not be sufficient to hire the best talents and expertise to cope with the new challenges confronted by banks and compete with global banks. The committee disapproved of a uniform pay structure in all banks and for all employees. In this context, the committee recognised and glorified the HR policy followed by new generation banks. Eventually, casualisation was covertly adopted by all banks, ignoring protests by the United Forum of Bank Unions. 


Accordingly, there was a craze for the casualisation of bank jobs. Initially, there was resistance from employees and unions. But the staff strength continued to be trimmed in course of time. Retirement was high. A good number of employees were hired by the new generation banks on higher offers. The casual engagement was first noticed in the subordinate cadre. There was no appointment of sub-staff, including sanitation workers, for a long period. Later, an acute shortage of sub-staff prompted branch managers to engage sub-staff on a daily wage basis to fill up vacancies caused by retirement, promotion and opening of new branches to do the perennial jobs. As the workload was heavy, eventually, resistance was weak.


Old generation banks casualised jobs in the subordinate cadre, like peons, sweepers, watch and ward, and security staff in the beginning. Subsequently, it had a contagious impact. New generation private banks, however, started outsourcing all jobs, both insubordinate and non-subordinate cadre. Currently, public sector banks are also, by and large, imitating new generation banks, wherever possible and wherever resistance is lacking.

State Bank of India even ventured into campus recruitment. In northern states, campus selection met with success. In Kerala, when campus recruitment was announced from selected colleges in Trivandrum and Ernakulam, two students from the Cochin University of Science and Technology challenged the move in the High Court of Kerala. Sensing the mood of the court, SBI withdrew so as to avert an adverse judgment. Later, SBI attempted to conduct the interview in Coimbatore. But as youth organisations staged protest demonstrations, SBI was forced to withdraw again.


In Kerala, casual sub-staff were engaged through different agencies by old generation private banks such as Federal Bank, South Indian Bank, Catholic Syrian Bank and Dhanlaxmi Bank. They recruited casual and contract employees against all cadres. In CSB Bank, the entire sub-staff are casual employees. In a non-subordinate cadre, while the number of employees and officers under the IBA pattern was hardly 1,400, the strength of employees with a monthly CTC between Rs 10,000 and 18,000 exceeded 4,000.

Attractive nomenclatures and designations are generously conferred on contract, casual staff in the non-subordinate cadre. Business Development Executives (BDEs), Sales Officers (SOs), Sales Executives (SEs), Gold BDEs, Customer Relationship Executives (CREs), Relationship Executives (REs), CASA BDEs, Junior Officers (JOs), Business Correspondents (BCs), Banking Ambassadors are some of them. The list is only illustrative. But wages paid to the executives, officers and ambassadors are less than that of a permanent peon or sweeper in the IBA pattern. They do not have defined service conditions -- no annual increments, no dearness allowance, no periodical wage revision, no leave benefits, and incentives are discretionary and not mandatory. 


All non-subordinate contract staff are made to sign individual contracts. The salary and incentive of each employee are different. There is no uniform pay scale. An employee is not aware of the salary received by another employee sitting next to him. No common agreement. No uniform service conditions. No collective bargaining. No individual workman is expected to seek amendments to the standard contract form presented before him. In essence, it is not a negotiated agreement. 


Casual, contract or outsourced employees constitute the entire staff strength in new generation private banks. Their number is ever increasing. In ICICI Bank, the staff strength is over a lakh. HDFC Bank has got 1,34,000 employees. Other new generation banks put together have nearly two lakh employees. Old generation banks in both public and private sectors may have around a lakh of casual, contract employees. Within a few years, the strength of regular employees under the IBA pattern in the banking industry will come down further. Casual, contract and outsourced employees will exceed regular employees on rolls in a short while.


There are two categories of casual, and temporary employees in banks. The first category of employees is directly engaged by banks such as Canara Bank, Bank of Baroda, Union Bank of India, Uco Bank, Indian Bank, and Punjab National Bank. They are paid pro-rata wages of a permanent sub-staff at the beginning scale. This will be above the minimum wage rate. If they fail to report for work on a day, they will be denied wages for the day. They are employed on a daily wage basis. No muster rolls.  No payslips. Union Bank of India is not paying any bonus. Those who have worked for 10 years and 10 days will be paid the same wages. No annual increments. As regards gratuity, dispute persists as to who will pay. 

The second category will be on contract or outsourced. State Bank of India is the only public sector bank which comes under this list along with Axis Bank, HDFC Bank, ICICI Bank, IndusInd Bank, Yes Bank, Kotak Mahindra Bank, etc. The contractor or intermediary will be paid by the bank. The contractor will appropriate a lion’s share of the wages towards commission and pay the balance amount to the workmen. Normally, the workmen are paid between Rs 12,000 and Rs 15,000 a month. The agency will take around Rs 6,000 per month per workman. EPF, ESI, bonus benefits are available. Here also, no annual increments are paid. Uniform wages will be paid to seniors and juniors alike. As contractors change every three or four years, the principal employer has to pay gratuity. But this is an area of dispute. As the contractor is changed, the threat of termination hangs like a sword of Damocles.

Nowadays, another problem has crept in. Banks invite tenders for contractors through the media. Prospective contractors have to participate in a competitive bid. Those who quote the lowest amount will be awarded a contract. The contractor will try to reduce wages on the plea that he has quoted the lowest amount. So, each time the contractor is changed, there is the threat of further wage reduction and, of course, termination.


According to an RBI estimate, the total number of subordinate staff in public sector banks is one lakh. That means, most of the bank branches in scheduled commercial banks, do not have a regular, permanent sub-staff to perform the perennial attender/peon/sweeper jobs. Housekeeping staff are performing attender/peon duties. They perform ‘Daftary and Cash Peon’ duties at branches attracting higher special pay as stipulated under bipartite settlements. Special pay attracts dearness allowance and superannuation benefits. They include cash stitching, slip bundling and filing.  Housekeeping staff engaged on a daily wage basis, on a contract basis or by outsourcing agencies, are not afforded any training to perform ‘Daftary and Cash Peon’ duties. This is a highly fraud-prone area in banks. Insider frauds are on the surge. Fraudsters within can easily displace or destroy the paid instruments every day. Internal control devices form the worst casualty. Random verification by inspectors or investigating officers cannot detect frauds or irregularities. If at all detected, the paid slips/vouchers involved in the fraudulent transactions will not be traceable. Signatures of customers cannot be produced in courts of competent jurisdiction for verification. Fraudulent entries and forgery of signatures in slips and instruments will lead to limitless irregularities. 


Casualisation per se leads to exploitation. It amounts to denial and deprival of due wages to the workmen, bypassing the laws of the land. A bank job is respectable and dignified but involves immense risk. A slip of a fingertip can cause irreparable injury and colossal monetary loss. Denial of dearness allowance, annual increments and periodical wage revision as entitled to regular employees under the IBA pattern is, by any matrix, unjust. All the employees, whether regular or casual, go to the same market, buy the same goods and services, rice, wheat, edible oil, pulses and vegetables. The cost of living is skyrocketing. The workers have no command over prices. Priceline is a lifeline. Blatant discrimination between one segment of employees and casualisation of bank jobs is indeed a denial of the right to a decent life.