Banking Job – PSU or Private Sector Banks

(Image courtesy: The Economic Times)

Over the last few months, we have been engaging with youngsters who are considering banking as a career option. What surprised me most was how thousands of our young graduates and post-graduates are spending (wasting?) years of their precious and most productive youthful time “preparing” for entrance tests conducted by various government departments and PSUs. I have done some of it myself, but that was before the country took a decisive turn towards economic liberalisation in the early 1990s. Today this is especially surprising when there are enough and more job openings in the private sector.

Especially in the non-metros, scores of our young people are trapped in a world where a government job is still the ultimate job they can aspire for. Never mind the reality that the largest private sector bank has a 2.5 times higher market cap than the largest government bank. And the global ratings agency Standard & Poor’s says that it is the country’s sovereign rating that is restricting them from giving the bank an even higher rating!

The reasons can be primarily paraphrased as follows: 

1.PSU jobs are considered safe

2.These jobs are largely 10 to 6 kind of desk jobs

3.These jobs do not come with targets or business pressure

Only Skills provide Safety

Job safety is what concerns them primarily. Their concept of a dream job is the one, which once they get in, nothing adverse can happen to them till they retire! Until now, a PSU bank job fitted the bill fully. But with the government clearly intent on privatising existing PSUs, this surely cannot be said for the current generation of job seekers. In the new world, regardless of ownership, the well-run banks will survive and grow stronger. Similarly, the well-skilled individual will thrive as long as he/she continues to upskill. Continued good performance in a good bank is therefore clearly the only guarantee of a safe (or great) career. Of course, this is true across any career, not just in banking.

So, build up appropriate skills to ensure that you do not just get a job in a good bank, but you are also able to consistently perform, once in. An above average performance will ensure you keep your job, but an even better performance will gain much faster career growth. And as you would expect, all such good careers definitely come packaged with good money too. This ability to grow much faster and earn much more than your lesser skilled and consequently lesser performing peers is another key benefit that private sector banks score over PSUs currently.

The Better Employers

The fear that private sector banks are hard on people is a myth. Once hired, the bank will invest adequate time and energy to help you improve your skills. If they realise that you will find it difficult to cope up with the needs of your current job, most banks first consider moving you into another department where your skills may be more appropriate. Staff attrition is a costly affair and hence will remain the last option always.

Having worked in both PSU and private sector bank, I can state without the slightest hesitation that the HR policies of private sector banks are much more humane and supportive of the needs of the employee. Most private sector banks are serious about building a reputation of being a good employer. Of course, this is not an ideal world and you should be prepared for some challenges for sure.

Good Banks will need More Business

Banks exist to do banking business. This simple statement is not that obvious to the vast majority of us brought up under some warped understanding of socialism and economics for whom banks exist to serve customers. Of course, they have to serve their customers well. But the purpose for which they exist is to serve the needs of the economy while keeping the best interests of its stakeholders, which includes customers besides employees and shareholders. Customer service and operational work are just the means to doing the business well. The underlying need for more and more business is the crucial aspect.

Banks need Employees mostly for sourcing Business

The desk job or office job or operational job are different variants of this theme that originates from the government ownership and the old scarcity mindset where customers had to visit bank branches multiple times for even basic needs and a loan sanction by the bank was an event worth a celebration. Today’s banks (including the PSU banks) and consumers have both changed with better awareness, competition and massive digitalisation. Customers do not visit banks for any standard banking needs anymore. Banks run after customers who in turn are now spoilt for choice. Operational work and customer servicing needs in banks have meanwhile moved from people to the digital world, freeing up their time to focus on meeting customers for business generation.  The need for people to handle banking operational work has reduced drastically and manpower hiring for banks have and will continue to shift towards sales, customer engagement and relationship roles. About time that you kill your fascination (if any) for an “office” or “desk job”. Even if you get hired for a job which looks like a desk job currently, do not bet against your role evolving very quickly to a sales or business role! And of course, people who get business for the bank will get paid more than those who are not in customer handling roles.

The 10 am to 6 pm myth

The 10 to 6 job in PSU banks is another myth. It was a myth even in 1992 when I joined as a Probationary Officer in State Bank. The officers in PSU banks work just as hard as their private bank counterparts. If anything, I suspect they actually work harder and in a much more difficult work environment.  Yes of course, there is significant work in private banks too. But they also pay more and reward performance even more and take complaints on late sitting much more seriously than what PSU banks do.

Workplace Stress

Let us now review another big myth. PSU banks have far lesser business pressure. Really? Unless of course if you are aiming for a PSU bank clerical job! If you are indeed eyeing a clerical position, it is useful to remember that when the overall manpower needs are growing for the banking sector, the number of clerical staff in PSU banks have fallen from 3.99 lacs in 2013 to 3.77 lacs in 2020.

Having worked in both setups, I know for a fact that a bank officer wanting to excel in his/her career will find the PSU banks just as challenging, if not more. A much poorer support system further compounds the problem in PSBs. As a branch head in a PSU bank, some 2 decades back, I had to source deposits and loans, sanction loans, handle corporate customers, assess agricultural funding needs, recover non-performing assets, handle government sponsored schemes etc. in the middle of all the operational work. While many things would have changed in PSU banks, surely the business pressure would have only gone up. It is probable though, that in PSU banks, you may be able to get away with not doing your business goals. I hope they are not the role models for our young job seekers!

Some recommendations for the 21 to 30

Let me end with some recommendations for the sub-30-year-old job seekers in the country who are keen on a banking or financial services career. Having worked in the top banks in both these sectors, I can possibly add some value to your thinking process. So here we go….

Do not have a break in your career

First and foremost, do not sit at home to prepare for “entrance tests”. Do some work, even if it is small. Your test preparation can happen concurrently. Do not worry too much about the initial salary. Getting some real work experience is definitely invaluable. And getting some income is better than no income. Treat this income anyway as a bonus and not the primary reason for your working.

Preferably, work in a more or less related area that you have set your sights on. For instance, if you are keen on a banking career, you may work as a cashier or an accountant somewhere or in some customer service role even in a retail shop or better still, in any sales job. Work of whatever kind teaches you many things that years of preparing for BSRB or IBPS cannot provide.

Don’t put all your eggs in the PSU bank job bucket

Apply for PSU bank jobs, if that is surely what you want. They are definitely good jobs too. But bear in mind that you shouldn’t put all your eggs in 1 basket. The last I read, some 240 candidates apply for each government job and it is clearly not easy to get through. While you prepare with a “can do” attitude, keep your options open.

Invest in skills

These entrance tests, though critical for you to clear to get these PSU jobs, clearly do not add any skills for you to use in your future career. So, if you have some free time, look at some skilling solutions parallelly which will add permanent value to your career.

These skills that you acquire will most certainly help you get a good private sector banking job meanwhile. And trust me, it is easier & faster too. In all probability you may actually start enjoying this new career and will drop your PSU dreams completely. And if that doesn’t happen, this new job is not going to be a hindrance for you to prepare and clear the PSU bank test. Actually, you will realise that this might help you in many ways in your group discussion or interview.

With the bank privatisation goal of the central government, you will probably need these skills, sooner or later. And even if your bank continues to remain a PSB, the working style and work ethics will surely start mimicking the better private banks.

Age matters

Finally, it is good to remember that it is easier to train somebody at 22 than at 32. The more you delay getting into an appropriate career, the more difficult it becomes for you. Many companies may take a risk in hiring unskilled or inexperienced but enthusiastic candidates when they are just out of college, rather than when he/she is nearing 30 with the only experience gained of sitting at home and preparing for bank exams.

Time is truly precious and there is nothing more important than your career at this stage of your life. Take a more informed and quick decision. I hope this article helps.

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