Finance Minister Nirmala Sitharaman has urged Public Sector Banks (PSBs) to revise their Human Resources (HR) policies to ensure staff can communicate in local languages to better connect with customers. This was addressed at the SBI Banking & Economic Conclave, where she pushed for performance appraisals to include proficiency in local languages. The Minister also recently recommended standardized, transparent transfer policies for PSBs that prioritize posting officers up to Scale-III within their linguistic regions, where feasible.
Key points from Sitharaman's appeal:
Restore the "human touch": Sitharaman noted that the personal connection between banks and customers has declined, which is hurting business. She emphasized that technology should complement, not replace, personal engagement.
Recruit for local language skills: She advised banks to hire staff who can understand and speak the local language of the customers they serve at the branch level.
Incorporate language into appraisals: The Finance Minister suggested that performance appraisals should reward employees for their efficiency in the local language.
Context of recent incidents: This push follows several incidents where bank officials faced backlash for refusing to speak local languages, particularly in states like Karnataka.
Improve credit flow: Sitharaman connected the poor "people connect" to an over-reliance on external credit information companies, which often have delays that negatively impact borrowers seeking loans.
Transparent transfer policies: Beyond language, the Finance Ministry in 2024 recommended that PSBs establish clear, standardized, and transparent transfer policies. This included the suggestion to post officers up to Scale-III within their linguistic regions when possible.
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