Promises of 2047, Pressures of 2025: The Banking Paradox
Nirmala Sitharaman’s vision of a resilient financial sector contrasts sharply with the fatigue, imbalance, and inequity within its workforce. A paradoxical story that exist contrary to aspirations of reforms share by Smt Nirmala Sitharaman's address & interaction at 11th SBI Conclave in Mumbai
By Bhushan Arora  • Published on November 9, 2025 #bhushanscribbles _______________________________________________________________

The Irony of Aspiration: A Vision for 2047, but Fatigue in 2025

In her address, Finance Minister Nirmala Sitharaman struck an inspiring note, framing Vikasit Bharat 2047 as a collective national journey — one where the government, institutions, and citizens work “together” to transform aspiration into reality by the centenary of India’s independence. The message was full of optimism, calling upon every sector to contribute to the making of a developed India that the next generation would be proud of.

Yet, for those within the banking community — the very system she calls the “backbone of the economy” — the irony of this vision is hard to miss. While the government speaks of shared progress and generational dreams, an entire generation of bankers continues to wait for basic workplace dignity and balance.

The Aspirations Within the Aspirations

As the nation dreams of Vikasit Bharat, young bankers have simpler aspirations — humane working hours, reasonable workloads, and the long-pending implementation of a five-day work week, a reform that has been debated, deferred, and diluted for years. The proposal, widely supported by economic forums and employee unions, remains stuck in administrative deadlock at the Department of Financial Services— despite its minimal fiscal impact and clear productivity benefits.

This contrast — between a government envisioning a “developed India” and a bureaucracy unable to deliver a basic workplace reform — underscores the widening gap between policy ambition and administrative empathy.

Backbone Without Relief

Public sector bankers are repeatedly described as the “pillars of India’s economic growth,” yet those very pillars are bearing an unsustainable load. Chronic staff shortages, mounting compliance obligations, and pressure from multiple social-sector schemes have turned everyday banking into an exercise in endurance. For a sector that has weathered financial crises, pandemic disruptions, and massive reform transitions, the absence of welfare consideration feels like institutional neglect.

The irony lies in celebrating resilience without reinforcing it — in calling the banking system “robust” while its people run on fatigue and frustration.

If India truly aims to build a “Vikasit Bharat,” it must first ensure that its most vital institution — the public banking workforce — is not left weary at the foundation of that dream. Development is not merely about GDP targets or global rankings; it begins with the well-being of those tasked with sustaining it.

The Irony of Recognition: Celebrating Banks, Neglecting Bankers

In her speech, Finance Minister Nirmala Sitharaman acknowledged that banks have played a “crucial role in helping the country move forward,” crediting them for India’s economic ascent from the world’s tenth-largest economy in 2013–14 to the fifth by 2021–22 — and expressing hope that India would soon rise to the third position globally.

The acknowledgment is well-deserved — but the irony is unmistakable.
While banks are hailed as the engines of India’s economic expansion, the people driving those engines remain among the most neglected segments of the public sector.

This stands in sharp contrast to the Finance Minister’s narrative of a strong and dynamic banking sector powering national growth. A robust economy cannot rest on an exhausted workforce.

Unequal Expectations and Uneven Rewards

Another irony lies in the asymmetry of expectations across public sector institutions.
Public sector banks are routinely pressed into socially driven, non-profitable initiatives — financial inclusion, rural penetration, loan restructuring — often without adequate compensation or risk-sharing. Meanwhile, other public enterprises, such as Oil or Insurance PSUs, operate with greater commercial freedom, better compensation structures, and fewer populist mandates.

Bankers question why the onus of inclusion and welfare implementation falls disproportionately on them, while the rewards — in terms of perks, benefits, and work conditions — remain comparatively inferior. This imbalance between responsibility and recognition has long been a source of frustration across the banking community.

Inclusion at the Expense of Inclusion

The government’s vision of comprehensive financial inclusion — extending banking services to the most remote corners — is laudable. But the human inclusion of the workforce enabling this expansion remains overlooked.

Many rural and semi-urban branches operate in understaffed conditions, with officers managing high transaction volumes in physically and digitally under-equipped environments. The paradox is that while the government wants banks to “touch every sector and every citizen,” the system has failed to meaningfully touch the lives of its own employees.

The Finance Minister’s statement rightly celebrates the role of banks in India’s economic journey — but recognition without reform risks sounding hollow. The backbone of the economy cannot be both celebrated and strained, both praised and ignored.

Until structural issues like recruitment, work-life balance, and fair autonomy are addressed, the dream of India reaching the world’s top three economies will rest on the tired shoulders of those who are building it from the ground up — silently, and often thanklessly.

While Finance Minister Nirmala Sitharaman lauded India’s banking reforms as a symbol of “resilience built on professionalism and high moral ethics,” the reality within the public sector banking ecosystem tells a different story. Employees argue that the very reforms celebrated for restoring “strength and profitability” have also brought heavier top-down control, curtailed autonomy, and burdened banks with non-profitable mandates in the name of social inclusion. The push for financial inclusion, though noble in intent, has stretched manpower and infrastructure to their limits — with targets expanding far faster than the resources to meet them. The result is a paradox: inclusion on paper, exclusion in practice.

The irony runs deeper when considering the safety and dignity of those implementing these policies. Cases of physical assaults on bankers during recovery drives are being reported with alarming regularity, highlighting the rising occupational risks faced by officers on the ground. Employee associations have repeatedly urged the Centre to issue directives to state administrations to ensure adequate protection for bankers performing recovery duties — a demand yet to find consistent response. Thus, while the government projects banking as a story of revival and resilience, for many employees it has become a story of risk without reward — where reform has meant responsibility without protection.

Adding to the disquiet are reports of administrative excess and intimidation by some local authorities while monitoring government-sponsored lending schemes. In several parts of the country, district officials have allegedly overstepped their mandate while enforcing district credit plans, often holding bank staff accountable for factors beyond their control. In a recent instance in October 2025, a PSU bank branch in Prayagraj district, Uttar Pradesh, was reportedly ordered to be vacated and closed by the District Magistrate — an episode that has stirred widespread concern within banking circles.

Such incidents underline the widening gap between the government’s narrative of a “reformed, robust” banking sector and the lived reality of those running it. For many bank employees, the current phase feels less like empowerment and more like exposure — to risk, to administrative overreach, and to public frustration. The irony, then, is unmistakable: the system being hailed as the backbone of economic resilience stands increasingly fragile at its human core.

The Irony of Digital Empowerment: Inclusion for All, Support for None

Finance Minister Nirmala Sitharaman spoke with conviction about the “strong foundation” laid for India’s banking sector. Citing major reforms like the Insolvency and Bankruptcy Code (IBC), the formation of NARCL, and the amalgamation of public sector banks, she described a system now poised to make the dream of a “Vikasit Bharat” a reality. Central to this transformation, she said, is financial inclusion — not merely the opening of accounts, but access to credit, insurance, and investment opportunities for every Indian. She lauded the rapid expansion of banking access through the Jan Dhan Yojana and DBT, highlighting how over 54 crore Indians have joined the formal financial system, and called for a new phase of “digital financial inclusion” driven by innovation and technology.

It was a powerful vision — but one that conceals a sobering paradox.

The Digital Divide Within Banks

While the government envisions seamless digital inclusion, the digital reality within public sector banks tells a very different story. According to RBI’s own evaluations, public sector banks lag significantly behind their private counterparts in key metrics such as digital adoption, mobile app performance, and cybersecurity readiness. Many PSBs continue to rely on fragmented, legacy systems — some dating back decades — patched together to meet the demands of new digital mandates. Employees often find themselves juggling multiple legacy platforms, manual data entries, and parallel systems meant to serve “digital inclusion” but often resulting in duplication of effort multiplying their workload.

In rural and semi-urban areas — ironically, the focus of financial inclusion — poor internet connectivity and obsolete hardware make even basic digital operations a daily struggle. The promise of “Digital India,” in many branches, is still constrained by the limits of physical infrastructure.

The Human Cost of Digitization

Behind the rhetoric of modernization lies the human toll of digital transformation. New government-driven initiatives — from account seeding and digital KYC to data analytics and mobile banking promotions — are introduced in rapid succession, often without corresponding staffing or training. Employees are expected to deliver seamless customer experience on platforms they barely have time to learn, while maintaining traditional operations alongside.

As one employee association aptly put it, “Digital India for customers has become manual India for bankers.”
Instead of enabling efficiency, digitization has in many cases shifted the burden of adaptation onto overworked staff. Employees face growing stress, limited cyber-awareness support, and in some instances, personal accountability for system-driven lapses or customer frauds.

Inclusion or Imposition?

The government’s emphasis on technological inclusion has not been matched with equivalent investment in human inclusion — training, manpower, and welfare.

Thus, the irony is complete: while India’s banking system is hailed as the bedrock of a digital, inclusive future, the people operating it are left navigating outdated systems, impossible targets, and rising stress — their hands full, even as their bandwidth runs out.

Cyber-security Risks and Accountability Paradox

The Finance Minister emphasized strengthening cyber-security frameworks, yet the on-ground gap between policy and protection is striking. Many PSBs lack dedicated cybersecurity cells at the branch level; alerts and mitigation protocols remain centralized, leaving local staff exposed. When fraud occurs — whether through phishing, UPI scams, or compromised accounts — frontline bankers are often the first to face customer anger, media backlash, and even disciplinary action.

In a few reported cases, officers have faced suspension or recovery penalties for cyber incidents rooted in system vulnerabilities rather than personal negligence.

Inclusion Without Support: The Policy Contradiction

Public sector bankers argue that true inclusion requires investment in people as much as in platforms. Without adequate digital literacy among employees and customers alike, and without a culture of shared accountability, the push for digital banking risks turning from an enabler of empowerment into a vector of vulnerability.

The Irony of Savings: Mobilizing Deposits in a Consumption-Driven Economy

Finance Minister call for banks to “innovate to address the growing gap between credit demand and deposit mobilization” touches upon a critical imbalance in the Indian financial ecosystem. She rightly emphasized that a bank’s “core business is to mobilize deposits and lend money,” signaling concern over declining household savings and sluggish deposit growth even as credit demand continues to surge.

The acknowledgment is timely — yet it reveals an underlying irony. The same liberalized financial environment that celebrates fintech innovation, digital wallets, and instant credit access is also diverting traditional household savings away from banks, eroding the very deposit base that public sector banks depend upon.

From Savings to Spending: The Policy Paradox

Over the past decade, India’s financial narrative has shifted from thrift to transaction.
In the pursuit of a cashless economy and consumer-led growth, policy incentives and technological ease have fueled an ecosystem of spend now, pay later — from UPI-enabled consumption to credit-linked e-commerce platforms. As a result, organic savings growth has slowed, with a larger share of household financial assets now flowing into mutual funds, insurance, and digital wallets rather than traditional bank deposits.

While such diversification deepens financial markets, it simultaneously weakens the deposit mobilization capacity of public sector banks, which still form the backbone of India’s credit system. The irony, therefore, lies in the fact that government policy has, on one hand, championed the fintech revolution, but on the other, left conventional banking institutions to compete in an increasingly fragmented savings market without comparable flexibility or innovation tools.

The Liberalization Dilemma

The liberalization of financial services was meant to modernize and expand access — and in many ways, it has. Yet, in the absence of regulatory parity, public sector banks find themselves constrained by rigid compliance frameworks, while new-age fintechs and payment banks attract liquidity without the same lending obligations or prudential norms.

This has created an uneven playing field: banks are tasked with sustaining national credit growth targets, but the low-cost deposits that once fueled their lending are being siphoned off into lightly regulated digital instruments.

For a developing economy aspiring toward “Vikasit Bharat,” this shift raises a structural concern: if savings — the very foundation of capital formation — decline, the sustainability of credit-led growth itself comes under strain.

The Need for Policy Alignment

If the government truly seeks to “mobilize deposits” while maintaining a liberalized, digital economy, policy coherence is essential. This means incentivizing savings behavior, restoring the attractiveness of fixed deposits, and ensuring that fintech-led financial products complement rather than compete with the traditional deposit base of banks.

Until such balance is achieved, the call to strengthen deposit mobilization risks sounding hollow — a reminder of the irony that while the government urges banks to gather more savings, its broader policy framework is simultaneously pushing those very savings out of the banking system.

The Irony of Trust: Ethics Preached, Incentives Misaligned

In her address, Finance Minister Nirmala Sitharaman urged banks to rebuild “trust by the way you offer your portfolios, your services, and your treatment of each customer without clubbing them into one class.” She acknowledged that while cross-selling insurance products through banks have helped insurance penetration, it has also “raised concerns about instances of mis-selling” and contributed indirectly to “increased borrowing costs for customers.” The minister’s emphasis on transparency, ethics, and customer-centricity reflected a commendable awareness of the problem.

Yet, beneath this appeal for integrity lies a deep structural irony — one embedded in the very incentive system banks operate under.

The Incentive Imbalance

In most public sector banks, monetary rewards and performance bonuses are concentrated at the middle and senior management levels, tied directly to the aggressive sale of third-party products like insurance, mutual funds, or credit cards. Frontline staff — those who actually face customers — receive little or no incentive for ethical advisory behavior, nor protection when they resist high-pressure sales targets.

This imbalance creates a perverse dynamic: senior executives push for ambitious cross-selling numbers to secure their own performance bonuses and recognition, while lower-level employees are left with no real choice but to comply, often under veiled or explicit pressure. The result is an institutional culture that forces mis-selling from the top down, rather than preventing it from the bottom up.

Trust Erodes from Within

This concentration of financial rewards among a few tiers of management fosters a “greed at the top, guilt at the bottom” environment — where bank officers must choose between meeting unrealistic targets or risking disciplinary consequences. Many employees report being instructed to bundle insurance or investment products into loan offerings, regardless of the customer’s need or understanding. In some cases, even small borrowers or pensioners are nudged into purchasing products they neither require nor can afford, simply to satisfy internal scorecards.

Thus, while the minister calls upon banks to “not burden customers with insurances they don’t require,” the reward structures within those very institutions incentivize exactly that behavior. The irony is stark: the rhetoric of ethics is loudest at the top, but the rewards for bending those ethics reside there too.

Restoring Real Trust

If banks are to truly regain public confidence, reforms must go beyond speeches and into performance and pay structures. Trust cannot be built on moral appeals alone; it must be supported by systems that reward integrity rather than manipulation. True reform requires aligning incentives with integrity. Banks must reward ethical conduct at the frontline, not just sales volume at the top. Without such structural change, appeals for transparency and ethics will remain eloquent ironies — spoken in public, but undone in practice.

The Irony of the “Personal Touch Without the People

In her address, Finance Minister Nirmala Sitharaman urged public sector banks to rediscover the “person-to-person contact” that once defined Indian banking. She reminded institutions that technology alone cannot replace the warmth and trust built through human engagement — that “old-fashioned banking blended with new technology” must remain at the heart of customer service. She even spoke empathetically about the cultural nuance of language, observing that when bankers are posted outside their linguistic zones, the absence of local connection erodes customer rapport. It was a candid and relatable reflection — but also one that exposes a profound institutional irony.

A Personal Touch without Personnel

While the minister calls for greater human connection, the banking workforce is, in reality, stretched to its limit. Acute staff shortages and relentless workload expansion have left little room for the kind of personal engagement she advocates.
Officers often handle multiple roles simultaneously: teller, relationship manager, loan officer, and compliance clerk — leaving little time for the “people-first” service model being idealized from the podium.

The irony is sharp: the government praises people-driven banking even as it presides over an era of people-deficient branches.

HR and Language: The Policy Contradiction

Sitharaman’s acknowledgment of the language barrier in postings touched upon a genuine challenge — but what she framed as an “unfortunate HR outcome” is, in truth, the direct result of policy design.

The recruitment and transfer framework of PSBs, overseen by the Department of Financial Services (DFS), has long been criticized for its disregard of linguistic and regional alignment. Officers are routinely transferred across zones with entirely different languages, sometimes every few years, in the name of uniform exposure and national integration.

However, in practice, this “rotation” often alienates both staff and customers. A banker posted from Kerala to rural Gujarat or from West Bengal to interior Maharashtra faces not just a language barrier but also cultural disconnect. Communication gaps lead to service inefficiencies, customer frustration, and ultimately, erosion of the very trust the FM seeks to rebuild.

Beyond the Banker: The Family Fallout

The consequences extend beyond the workplace. Under the New Education Policy (NEP), each state has the autonomy to enforce regional languages as compulsory subjects. For bankers’ families who move frequently across states, this means school-going children face repeated academic disruptions — forced to adapt to new languages, curriculums, and syllabi with each transfer.

Thus, what the minister described as a matter of “basic etiquette” — learning a few words to please the host — becomes an existential challenge for thousands of public sector employees and their children. While saying “bonjour” in Paris may charm a host, surviving in a non-linguistic posting in India is far from charming — it is exhausting, isolating, and professionally limiting.

The Real Solution: Policy Before Politeness

If the government genuinely seeks to revive the personal touch in banking, the solution lies not in appealing to etiquette but in restructuring HR and staffing policies. Adequate recruitment, regionally balanced postings, and language-sensitive placements must precede any expectation of customer intimacy. Otherwise, the call for “human connection” will remain a rhetorical flourish — a sentimental reminder of what banking used to be, not what it can sustainably become.

Each of these contradictions — between policy and practice, reform and reality — underlines the urgent need for empathy in economic governance. India’s journey toward 2047 cannot rest on exhausted shoulders or rhetorical optimism; it must be built on fair, humane, and accountable reform that truly empowers those who form the backbone of the nation’s financial system.