State-run banks may hire directly from B-schools

Public sector banks (PSBs), which are finding the going tough with the rising level of non-performing assets (NPAs) and acute shortage of staff, will soon be allowed to visit the country’s business and engineering schools for recruitment.

Public sector banks (PSB) could be allowed to recruit straightaway from the country’s business and engineering schools in a step to reduce acute shortage of staff.

The newly-launched Bank Board Bureau (BBB) in consultation with the government is soon likely to announce the roadmap for the campus recruitment(HT Archive)

At present, state-owned banks are barred from hiring directly from campuses unlike their private counterparts. But a similar process is already on as specialists are being hired from the private sector on contract.

Campus recruitment is considered a much-needed solution to manpower shortage at a time when state-run banks are looking to get a handle on rising levels of non-performing assets.

The newly launched Bank Board Bureau (BBB) in consultation with the government is likely to announce the roadmap for the new hiring strategy.

This comes after the Bombay high court declared campus recruitments by PSBs as “non est in law” in 2013. A claim of non est factum refers to a contract that was signed by mistake. The Supreme Court dismissed the appeal and thereafter the government issued a circular in 2014 to all state-owned banks to stop campus recruitments.

Sources said the top court would be appealed to reverse the order.

“There is shortage of talent and these banks are expected to compete with their private sector peers. The issue has been discussed, we are looking into the legal aspects ... Banks must be free to recruit the best talent from wherever,” said a bank chairman, who did not wish to be named.

Finance minister Arun Jaitley said on March 5 after the second Gyan Sangam, a two-day retreat for public sector bank chiefs, that provisions must be made to allow state lenders to recruit directly from B-schools.

Legal experts had countered that the government have to present a “solid ground” to challenge the court order.

“The order can be revisited only on the ground that it is required for larger public interest … Any such move by the Centre would be subject to judicial scrutiny,” said Manoj Kumar, the managing partner of Hammurabi and Solomon, a legal services firm.