Wake up call for India’s Nationalized Banks

PSU Banks need to shape up
PSU Banks need to shape up

Sree Iyer

A recent experience at a nationalized bank overwhelmed me and led me to muse loudly if the nationalized banks have what it takes to adapt to compete with the more nimble private banks…

It all started with me wanting to withdraw 50,000 from my savings account. The account was established in a city different from where I was trying to withdraw the cash from. I did not have my cheque book and asked the clerk for a withdrawal form. Wrote out the amount, signed in and dated it as MM-DD-YYYY (I am an NRI) and submitted it. The first observation was that since the account was in a different city, I could only withdraw 10,000! I said I could withdraw up to 20,000 from the ATM and the only reason I was dealing the bank official was because I needed 50K… Rules were rules, I was told and got the slip back. Cursing my luck, I changed the amount down to 10 and initialed every change and submitted it back.

I was given a token number and started playing music in my head as I sat down to wait my turn. The accountant, in the meanwhile, to whom the slip had moved to, called me and asked me to change the date from MM-DD-YYYY (he called it American format) to DD-MM-YYYY. I did that and signed it (rather I was getting impatient and scribbled my signature). He then compares it with the signature on the back side and asks me to re-sign it, to match my original signature! By now, there was no space left to make changes so I started over again, on a new slip, entered all the details in the exact way they wanted and re-submitted it and lo and behold, it was approved and I got richer (wait, if I withdraw cash from my savings bank account, do I get richer?) and walked out with a sense of accomplishment. I also stopped at the ATM outside and withdrew 20K (I needed 50K, remember?).

While waiting for the cash, I looked at the number of staff in the bank… There were two clerks, of whom only one was accepting requests and 2 cashiers, one of whom appeared busy while the other was doing all the work. Then there was the accountant, the assistant manager and the manager. If I was running this bank, I would need no more than 2 people, both of whom would do whatever the customer wants e. g. deposit/ withdraw/ drafts etc. All data (even in this bank) is computerised and should be available at the fingertips of any official in any branch! After all, it is my money right?

I hear that Nationalized Banks are unionized and will not approve such drastic cuts in manpower but the reality is that water flows from a higher level to a lower level and if the customer is not happy with their service, they will take their business to a nimbler, more responsive bank. PSU Banks will be relegated to serving areas that private banks won’t touch and it will be a slow, painful death. The choice is clear – Perform or Perish.

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An inventor and out-of-the-box thinker, Sree Iyer has 37 patents in the areas of Hardware, Software, Encryption and Systems.

His first book NDTV Frauds has been published and is an Amazon Bestseller.It ranked second among all eBooks that were self-published in 2017.

His second book, The Gist of GSTN which too is available on Amazon as an e-Book and as a paperback.

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Sree Iyer
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  1. Dear Anna,

    What you say makes a lot of sense and would hold true in the western world, not in the eastern world, esp. not in Bharat. When it comes to money, savings and financial security, people tend towards trustworthiness and not banking convenience. What you say might be partly relevant to an urban customer or someone who’s given to an urban upbringing but not the experienced, not-so-urban ones. However, this reasoning is no justification for the PSBs to be a tortoise while the other private banks are fast-running rabbits and a little smart too.


  2. Would a bank in the US accept DD-MM-YY on their check if I told them I am Indian and they should accept the “Indian format” ?

    Would a private sector bank in India accept MM-DD-YY on their check if I told them I am an NRI?

    Should any CREDIBLE BANK accept a cheque/deposit slip because you scribbled your signature out of impatience?

    Limiting the withdrawal amount is an RBI rule to prevent someone using a fraud signature (looks very much like a scribbled one) so that YOUR money is protected.

    This is not a rule applicable just to nationalized banks.

    Do you think you would have any better experience if you were to try this at a private sector bank?

    Did you visit a comparable private sector bank of comparable size and compared how many “non-unionized employess” they need to run their operations?

    How long have private sector banks operated in India? Any research or analysis on why they haven’t already caused a painful death for nationalized banks, which continue to thrive?

    Compared to the well articulated and researched articles by Navin this needs to be on someones personal venting blog.

    Based on the content I feel this article should have been titled “Wake up call for NRIs wanting to withdraw more than 50K: dont forget your cheque book”

    Just my 2 paisas 🙂

    A small time resident Indian PSU bank employee (non-union)


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