Finance Ministry responds to questions on performance reviews and premature retirement of underperforming employees in PSBs.
Earlier this week, in the Lok Sabha session, questions were raised regarding the government's directive for performance reviews in nationalized banks, including the possibility of premature retirement for underperforming employees. In order to get clarification on the issue, Selvaraj V and Subbarayan K asked the queries.
Minister of State for Finance, Pankaj Chaudhary, confirmed that Public Sector Banks (PSBs) already have provisions for employee performance reviews as per their respective Service Regulations and Bi-partite Settlements. These reviews involve a comprehensive evaluation of several criteria, including the employee’s service profile, health status, key responsibility areas, annual performance reports, vigilance proceedings, leave records, and other relevant factors.
The government further clarified that the Department of Financial Services, in a letter dated September 26, 2024, had advised PSBs to conduct periodic reviews of their employees based on the existing provisions and the schedule established by the Department of Personnel & Training (DoP&T). By alignment with larger initiatives to fortify the administrative framework of public sector organizations, the objective of these studies is to improve the economy, speed, and efficiency of government operations.
Chaudhary reassured that sufficient procedures are in place under the Bi-partite Settlements to resolve concerns of underperformance. By regularly assessing employees and making sure they meet the rules, the government is attempting to increase PSB's effectiveness. However, it was emphasized that fairness would be maintained throughout the process, and these reviews are intended to support the growth and efficiency of the banks, rather than solely penalizing employees.
As the government has noted, PSB performance reviews form part of a long history of a system that is geared towards increasing productivity and addressing poor performance. In addition to promoting employee growth and improving general operations within public sector banks, the reviews are aimed at ensuring equity.