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How do you provide better customer service in state-run banks?

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Author: Vinith Kumar

Papia Ghosh Dastidar, 63, has been visiting a branch of Punjab National Bank for several weeks in the recent past, trying to submit her mother’s death certificate and claim the amount left in her savings bank account as the nominee.

Every day, she has to stand in queue for hours and the amount still hasn’t been transferred to her.

“I am a senior citizen myself. Standing in a queue for so long and repeatedly coming back is too difficult for me,” said Dastidar, a resident of Kolkata. The situation is no different in cities such as Bengaluru, Mumbai, and New Delhi.

This was something that I read in an article on money control, “Stalled recruitment in state-run banks leading to poor customer service, employee churn.

Customer service is deteriorating in many branches of public sector banks, and some of the key reasons are:

  • There just aren’t enough employees staffing them. There is hardly one employee for every 1000 customers in most public sector banks
  • Unhappy employees are leaving public sector banks in search of better opportunities. There is very little work-life balance
  • State-owned banks have scaled back recruitments. There has hardly been any active recruitment in the past five years. Besides, in the early 1990s, employment was frozen for ten years, and many of those who joined before the 1990s are retiring now
  • Public sector banks (PSBs) have to continue with several branches, especially in remote rural areas, even if there is zero profit from those branches
  • Employees have to work beyond regular hours, and they have to extend their responsibilities beyond their assigned roles
  • Sudden rise in the number of customers due to financial inclusion schemes such as Pradhan Mantri Jan Dhan Yojana (PMJDY), which has benefitted over 455 million people, giving them a basic savings bank account and access to other services

Many customers are moving from PSBs to private banks as they offer better customer service and easier transactions online – web and mobile.

Given this situation, how do PSBs continue to retain their existing customers and attract more customers?

What do PSBs need to do?

Most PSBs have core banking solutions, but they make it difficult for customers to access Internet banking. That process will have to be made accessible so that 20 to 30% of the customer transactions can happen online.

Besides, have kiosks at every physical branch to handle transactional tasks like deposits, withdrawals, statement printing, balance inquiry, cheque book requests, and cheque clearances.

This would mean that about 50% to 60% of the queries would be addressed by the online and kiosk facility. 

PSBs need to invest in a cloud-based contact center platform and staff them with agents who are conversant in local languages and English. Besides, have a custom IVR that has the options people from a particular region need and direct the calls to the appropriate departments for faster resolutions.

Ensure that the contact center is integrated with your core banking solution and the customer records. So, whenever the customer reaches out to agents, they should be able to access all information related to the customers and provide the best possible experience for them.

Promote the numbers for customers to reach, and the agents should be able to guide them with even complex problems like the one that Dastidar faces.

This would considerably bring down the load on the staff in physical branches and would result in better customer satisfaction.


Public Sector Banks will have to adopt technology to address the customer service challenges they face today.

This is the most accessible and feasible solution as the technology investments won’t jack up the costs compared to increasing the number of resources. Besides, it would help address customer challenges better, providing much-needed peace of mind and a work-life balance for the existing employees of PSBs.

It is time to extend technology beyond the core-banking solutions and build customer experience as a part of PSBs DNA.


About the Author: Vinith Kumar


Vinith is a person wearing many hats. Having his educational background in commerce and criminology he has spent all the years of his career at various levels of administration in different verticals of businesses like human resources, Exim Trading and Real Estate and Construction. He has been part of the ClearTouch team since its inception in 2016 in India. His vast experience has helped ClearTouch to set up its business in India and run the day-to-day functioning smoothly.
Vinith as the General Manager of ClearTouch oversees the Administration and the Financial aspects of the company. He as the authorised signatory of the company is the representative of ClearTouch in all the documentations having us as a party to it. He also handles the escalations received from clients and vendors and ensures the raised issues are resolved amicably for both sides.
Vinith has been a good team player taking along with him all his team members enabling each of them to be a part of the success story of ClearTouch. During the pandemic, he has ensured all the members of the ClearTouch family were safe and extended all possible support to each of them to overcome their crisis caused by it.