Are private sector banks giving more growth in terms of salary rather than Public sector Banks
Let us start the article with some facts regarding the compensation package offered by the public sector banks in India and the private sector peers. If we compare the entry level, the average CTC in a PSB will be around 5.7 lakhs whereas the private sector pays around 4 lakhs per annum to its freshers but once you climb up the corporate ladder, the Chairman of SBI (taken as a representative of public sector bank) gets around 24 lakhs in compensation compared to around 5.2 crore for her counterpart in ICICI, the nearest private sector competitor of the grand old bank. So, why are there still lakhs of candidates applying for PO post in PSBs? The only reason is the so called job security in these banks as compared to the private and foreign players in the industry.
Public Sector Banks: Pros and Cons
In order to compare the public and private sector banks, let us discuss the pros and cons related to both. PSBs can offer you a comfortable and less stressful life but obviously a much lower pay package.
- Pay Package: The compensation package for PSBs is more only in the entry level but the growth is not commensurate to the experience you gain once you complete around 4-5 years service in the bank. Hence, SBI may offer you around 8 lakhs CTC at the entry level but its Chairman earns 20 times less than the CEO of its closest rival ICICI Bank.
- Work related Stress: Private sector banks have targets waiting for you and you have to deliver on them, otherwise, you are supposed to give proper explanation in the absence of which your future becomes uncertain in the bank. The scenario is not the same for Public Sector Banks as, there, targets are allocated but not strictly followed.
- Growth and Learning Curve: According to the management theories, the harder is the goal, the better is the response from the employees to achieve that. This can easily be related to the private sector banks as there you are always challenged and you have to explore new horizons every day. In Public Sector Banks, you have to work hard to get a job but after that, the learning curve sees a downward turn as you are challenged adequately
- Job Security: This is one aspect where the public sector banks score more over the private sector peers. Until and unless you do something unethical, you are bound to have your job irrespective of your very good or dismal performance in your role. So, once you get that coveted job, you have it unless you do something to lose it
Private Sector Banks: Pros and Cons
For private sector banks, the biggest draw is obviously the pay package in the middle and senior management levels though that in the junior management level is better in the public sector banks.
- Better Package: Private sector banks will definitely offer you more in terms of compensation as compared to the public sector ones once you get the desired experience. This is the reason there is an exodus of talent in the basically middle management level of the banks in the public sector nowadays as the employees are often poached to the private sector banks which offer them much higher pay package
- Job Related Stress: This aspect of banking is mainly related to private sector banks more than the public sector ones. You are constantly challenged and you have to give your best every day in the job. You have to reach your targets well in time or you stand the chance of losing your cushy cabin job in the bank. Public sector banks are better in this aspect since much less stress is there in terms of targets allotted
- Challenging Assignments and learning opportunities: This is one aspect where private sector banks score more over the public sector peers since once you show good performance in your job, you will be given more challenging assignments and you get the chance to move up the corporate ladder in recorded time.
- Meritocracy rules in Private Banks: This is for those candidates who are toiling hard for IBPS PO (SBI is one public sector bank that still values meritocracy), the job requires talent to get into, after that, there is minimal role of talent. So, talented folks, get ready to tolerate the seniority based scenario of promotion and everything in PSBs. Though this ruins the work culture as is seen in the balance sheets of these PSBs, they are yet to understand it.
- Performance Based Incentive is there in Private Sector Banks: Yes, you perform well and you get bonus linked to that and you do not perform, you do not get anything. Whereas in PSBs, it does not matter whether you perform or not but the only thing is that you come to office and leave it in time. So, performing lot, perform in IBPS PO one last time, after that, you are better off without performing much.
Public sector banks and private sector banks have their pros and cons, obviously. Private sector banks are good if you have experience in your kitty whereas as a fresher, public sector banks are better. The ideal strategy is to stick to public sector banks for some time and gain some experience and after that you get a lot of opportunities and high pay package in any of the leading private sector banks of the country, that is, if you are going to be a career banker. But you are a talented performing individual, frustration is the first thing you are going to face in PSB starting from your illogical posting to your abysmally low pay package.