Role of Probationary Officer (PO) in Banks

Probationary Officer (PO) is a very lucrative post among bank aspirants as it is the first ladder to enter and serve as an Officer in Banking Industry.  

Designation Probationary Officers holds (PO) in banks

A PO holds the designation of an Assistant Manager (AM) on Probation. He is in Junior Management Grade-1 (JMG-Scale 1) Officer thus he is often called as Scale 1 Officer or Asst. Manager. 

Initial Posting of Probationary Officer(PO)

After selection as a Probationary Officer (PO) in a particular bank a PO has to go through Induction training programmes in Management Training Centres/Colleges of particular banks which lasts for 10 to 20 days. The duration of training varies from banks to banks.

After completion of their induction training in Management Training Centres/Colleges  a PO can be posted anywhere in India, as the service of Government Bank Officer is All India based service.

They can be posted as an Asst. Manager on probation in different branches or Head Office or Corporate Office or Zonal Offices or in specialized branches like SME/Retail Loan branches, Forex/Treasury Branches etc. as per placement policy of particular banks.

Duration of Probation Period

Normally the probation period is of two years in which the officer is exposed to different types of banking related works. In some banks, the duration may be limited to one year. 

The officers or probationers may undergo frequent transfers or deputations during the probation period. Once the probation period is completed the officer is confirmed as an Assistant Manager and gets his or her permanent posting after satisfied Police Verification report from their Local SSP Office or police station.

Some banks are now-a-days placing officers as Deputy Managers also, just after confirmation, provided they pass the test conducted by the bank.

For example: State Bank of India conducts a confirmation exam. If a probationary officer passes the exam, he is confirmed as an Assistant Manager. In fact, State Bank of India even gives a chance for promotion to Scale II to candidates who perform exceptionally well in the exam. Other Nationalized Banks do not conduct exams for confirmation.

Role of Probationary Officers (PO) in banks

POs are the talented young officers who have ample of potential and a great zeal to work faster and perform better than others.

1. Multitasking job – The role of Probationary Officer is a multitasking job and they are assigned for various banking activities, which helps them to get familiar with various working procedures of the bank.

2. Practical knowledge – POs are practically trained in various fields, like – Marketing, Accounting, Loans & Advances as well as Finance.

3. Customer services – Often POs are required to handle the customers of the banks, used to guide them about the banking facilities and products available to them, like issuing Cheque books, ATMcards, Demand Draft, etc. Customer complaints like discrepancies in accounts, rectification of undue charges are also handled by them.

4. Supervision of Clerical work – All the clerical work such as managing cash, opening account and customer dealing is done under the supervision of POs. In case of cash transactions, PO is responsible to check whether Clerk entered everything correctly or not and authorise the transactions.

5. Loan Processing – One of the major functions of the bank i.e. providing loan to the needful is also taken care of by a PO. Before granting the loan to the customer, all the documentation is to be done under his/her supervision.

Basic Salary of Probationary Officer

A Bank Probationary officer’s starting salary in most of public sector banks and even in some private banks is same.  The latest revision of salary of Bank PO has taken place wef from 1st November, 2012 (The final agreement has been signed only on 25th May, 2015) All newly recruited POs are placed in the following scale at the 1st stage of the same. The revised salary as on 1st June 2015 will be as per Scale I given below:

(The figures in the brackets indicate the annual increment and the number of stages for which the same is applicable)

Thus, the revised initial Basic Pay of a Bank PO will be Rs.23, 700/- as from 1st June 2015 onwards.

Major allowances payable monthly to Bank POs

In addition to Basic Pay Pos are eligible for the following allowances:-

1. Dearness Allowance (DA):  DA in banks is revised on quarterly basis (i.e. in the months of February, May, August and November) based on the Consumer Price Index (CPI) as declared by Government of India. The new revised current DA (for the month of May 2015, June 2015 and July 2015   is 33.70% of the Basic Pay).   DA can go up with higher inflation and also come down if the inflation rate is in negative.

2. Special Allowance: This has been added in 10th BPS (wef 01/11/2012) and for scale I is 7.75% on which DA is also payable

3. HRA (House Rent Allowance): This depends on the place of posting and it can be either 9.0% or 8.0% or 7.0% depending on the place of posting.

4. CCA (City Compensatory Allowance): This also depends on the place of posting and can be either 4%  (maximum Rs.870/-) or 3 %( Maximum Rs.600/-) or 0%

Gross Salary

The above statistics indicates that the total salary of a probationary officer on joining at a metro station will be around Rs.37145/-.   However, the total salary of a probationary officer who has to join in rural area will be about Rs 35800/ (This includes HRA also). However, SBI gives four additional increments to Bank POs and thus gross salary will be higher by about Rs 5000/-.pm.

In lieu of HRA, most of the banks allow you to take leased accommodation, the amount of which varies from bank to bank and also depends on place of posting (The entitlement of such accommodation ranges from Rs 10000 to Rs 29,000 p.m (approximate). Thus, we can say the salary cash component of Bank PO in Public Sector banks is around Rs 37100 pm whereas in SBI, the initial cash component salary of SBI PO is around 43000 /-pm (including HRA).

At last a probationary officer has to work in various departments. It can be Deposits, Loans & Advances, Clearing, Pensions, Payment and Cheque clearances, Fixed Deposit, ATM and Internet Banking, Credit Card, Report Making, etc. Work allotted to them mainly depends upon the policies of a particular bank also place of posting where he or she got posted. They are like diamonds for every bank and banks also want to polish them by giving them best training.

Highlights of FSR- June 2016

 The Reserve Bank of India released the Financial Stability Report (FSR) June 2016on 28th June 2016. The FSR reflects the overall assessment on the stability of India’s financial system and its resilience to risks emanating from global and domestic factors. This Report also discusses issues relating to development and regulation of the financial sector. 
This issue of FSR brings out a thematic discussion on ‘An optimal configuration for the financial system – 'Banks versus Market’ in the context of the progress towards making the Indian financial system more effective in supporting the economic growth.

Highlights of FSR- June 2016 are summarised below:

Overall assessment of systemic risks

• India’s financial system remains stable, even though the banking sector is facing significant challenges. As global uncertainties and transiting geopolitical risks impact India, continuation of sound domestic policies and structural reforms remain the key for macroeconomic stability.

Global and domestic macro-financial risks

• The global recovery remains fragile amidst weak and uneven growth, a slowdown in world trade and prevailing uncertainties in financial and commodities markets. The unintended side effects of current ultra-easy monetary policies being pursued in many advanced economies - without any clear signs of an exit strategy, are becoming evident.
• Indian economy at this juncture stands out in terms of growth and investment potential. With the Government’s commitment to continue on the path of fiscal discipline, the efforts on containing the revenue deficit and rationalising subsidies need to be reinforced, even as gross fixed capital formation needs a fillip.
• India’s external sector indicators show a relatively stronger position. However, a faster growth in India’s oil import in terms of volume in recent years makes it imperative to be alert to the risks of commodity cycle reversals.
• The prediction of a normal monsoon augurs well for agriculture sector growth in 2016-17, although the spatial and temporal distribution matter as much as the total quantum of rainfall. Given its large impact on broader political economy, the agriculture sector needs coherent policy measures to address sustained food price pressures and the overall rural distress.
• While stress in the corporate sector showed some signs of moderation in 2015-16, the risks of lower demand and weaker debt servicing capacity continue.

Financial Institutions: Performance and risks

• The business of scheduled commercial banks (SCBs) slowed significantly during 2015-16. The gross non-performing advances (GNPAs) ratio increased sharply to 7.6 per cent from 5.1 per cent between September 2015 and March 2016, largely reflecting reclassification of restructured standard advances as non-performing due to asset quality review (AQR). The restructured standard advances ratio declined but with a marginal increase in the overall stressed advances ratio from 11.3 per cent in September 2015 to 11.5 per cent in March 2016. The capital to risk-weighted assets ratio (CRAR) of SCBs showed some improvement across the bank-groups. However, the profitability of SCBs declined significantly and the public sector banks (PSBs) recorded losses during 2015-16.
• Asset quality of scheduled urban co-operative banks (SUCBs) as well as non-banking financial companies (NBFCs) improved. The performance of NBFC sector in general is relatively better than that of PSBs.
• From the perspective of the larger financial system, the flow of funds among various types of financial institutions assume importance. The asset management companies managing mutual funds (AMC-MFs) followed by insurance companies are the biggest fund providers in the system, while SCBs followed by NBFCs are the biggest receiver of funds.

Financial sector regulation

• Internationally, apart from the focus on the measures related to improving the capital and liquidity position of banks, the policies aimed at promoting public confidence and upholding the safety and soundness of the banking system with emphasis on issues of transparency and accountability assume a greater degree of significance.
• As Indian banks are currently focusing on cleaning their balance sheets in the wake of the AQR, various measures taken by the Government to address the issues related to distressed industrial sectors are expected to help the process and improve the credit growth. The regulatory steps taken by the Reserve Bank are aimed at improving banks’ ability to deal with stressed assets. While the proposed ‘Large Exposures’ framework will help in mitigating the risk posed to the banking system on account of large aggregate lending to a single corporate entity, the recent guidelines on a ‘Scheme for Sustainable Structuring of Stressed Assets (S4A)’ will help in putting real assets back on track through another avenue for reworking the financial structure of entities facing genuine difficulties, while providing upside to the lenders when the borrower turns around.
• SEBI’s framework providing an electronic book mechanism for issuance of debt securities on private placement basis is expected to result in improved efficiency, transparency in price discovery as well as reduction in cost and time taken for such issuances. With the regulatory impetus, the commodity derivatives market is poised to evolve with new products and new categories of participants leading to better liquidity and more efficient price discovery, further aided by recent initiative of Government in setting up the National Agriculture Market (NAM).
• There is a need to assess the resilience of reinsurance companies in the face of increasing concentration of contingent liabilities in a few reinsurance entities. The move towards adopting risk based supervision by the pension sector regulator is expected to ensure efficient allocation of supervisory resources.

For detailed FSR please click on the following link: Detailed FSR Report June 2016
Source: RBI press Release.