UCO Bank, A nationalized bank tried to start a new phenomenon in Government Banking scenario i.e. Performance based salary, which ultimately dead after creating a lot of panic and noises. First time this was introduced in the public sector bank where bank’s zonal heads had requested suspension of salary payments to 11 branches on grounds of non-performance. Under order regional head issued request to management to stop salaries in 11 key Kolkata branches that failed to deliver on key parameters such as lending and recovery of sticky loans.
This was an effort by UCO bank’s turnaround strategy who is currently facing the RBI corrective action plan due to higher rising NPA level. The bank’s net losses widened to Rs 663 crore in the first quarter to June 30, while asset quality worsened to 19.87 per cent of gross advances.
This is wide clear that there is no such provision to stop monthly pay and salary due to non-performance in state-run banks, where salaries and increments are fixed through a bipartite settlement between the managements and staff unions.
Later management of UCO Bank has issued a note saying that stoppage of salary of all staff in these 11 branches may not be prudent and re instate the salary.