Band-aid solution

Avoid linking bank employee benefits to recapitalisation

On paper, the finance ministry’s letter to 10 weak state-run banks linking recapitalisation to a cut in staff increments and benefits appears logical. The big questions, as always, hinge on the willingness of the powerful bank unions to acquiesce to such cutbacks and, if they do, whether such measures will make a material difference to the efficiency of banks. These banks, which have collectively requested a capital infusion of Rs 8,586 crore, tend to be among the most overstaffed as well as the least efficient. In the financial year 2015-16 and the first nine months of 2016-17, seven of these