Pathology of Nationalized Commercial Banks

By Choudhry, Maher Elahi | Economic Review, March 1993 | Go to article overview

Pathology of Nationalized Commercial Banks


Choudhry, Maher Elahi, Economic Review


A commercial Bank as an organism is a complicated aggregation of complementary cellular compartments. The health of a bank has therefore its origin in fitness of each one of these compartments and the illness reflects the dysfunction of one or more of the same.

The apparent debility and general dilapidation points out that the NCBs have been afflicted with a serious malady for quite some time. Although some morbid and depraved conditions did exist in the pre-nationalization period, yet deterioration at a galloping pace set on after the nationalization took place. It is therefore, imperative that immediate and appropriate curative measures are taken to safeguard and strengthen the immune system so as to keep these institutions in working condition at least.

"Pathology" or science of diseases is therefore intended to be applied to identify the nature and symptoms of the ailments pertaining these organisms. So that proper diagnosis leads to suitable prescription for treatment purposes to restore the health of the NCBs through psychotherapy, medication or surgery. Broadly a Commercial Banking institution can be segmentized into the following cellular compartments.

1. Personnel

2. Financial

3. Resources Mobilization

4. Lending

5. Peripheral activities or services.

Personnel

The Commercial Banking is an industry which provides service to its clients. The quality of the service is determined by the quality of the personnel engaged by a bank for that purpose. This compartment due to gross impairment in functioning has reached a stage where its pulsating microcosm is hardly capable of adapting its structure and activity to the demands and stresses of the objective conditions or prevalent environments. It is observed that a number of microbiologic agents, ranging in size from sub-microbiologic to grossly visible nematodes have massively attacked this compartment. These viruses, and bacterias are obligate parasites that is, they can survive only within a living organism.

These vagrant and variegated parasites have pushed these institutions to have verge of serious break-down, near to collapse of system and discipline as evidenced by the following symptoms:-

* Overstaffing

* Demeritization

* Bureaucratization

* Unionization

Overstaffing: In the overall scenario of wide spread corruption, favouritism and influence peddling, a large number of recruitments have been made without consideration for matching quantitative requirements. The politicians, civil and military bureaucrats, highly placed bank executive joined by Union Mafia have had a free hand, to act on their own discretion this behalf.

It did not only caused unnecessary drain on the resources, but also impaired the quality of service. As an honest day's work is not available for each and every member of staff, many of whom possess very low level of capabilities. One can find the staff whiling away time almost everywhere, even contaminating and infecting those who have will as well as some work to perform. One may also see hordes roaming to and from in the name of unionism on whole time basis disturbing those who want to work and glorifying morbid idleness and germinating contempt for work and duty.

As the transfer and postings can no more be done on merit and against commensurating requirements. This phenomenon has distorted the position. The comparatively unattractive places where staff is needed to remain understaffed, whereas in big cities and towns there are bulging pockets of excess staff who cannot be moved for proper utilization.

Demeritoriousness: There are a very few personnel at management level who apply themselves adequately to their assignments and jobs. Most of them keep busy in entertaining friends or relatives, sipping tea or in making personal call to the superiors to revamp their so-called public relationing and to their subordinates to attend to their personal chores and petty requirements. …

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