IOB Under Pressure as Government Moves Forward with Divestment Plans; Bankers Combat Immense Workload

The Indian Overseas Bank (IOB), one of the five public sector banks (PSBs) identified for divestment by the central government, is under increasing pressure to boost performance. Employees across branches report rising workloads as management imposes ambitious targets to improve financial metrics and sustain the bank within the public sector.

Government’s Divestment Strategy
The Indian government has announced plans to offload 5-10% of its stake in selected public sector banks, including IOB, UCO Bank, Central Bank of India, Punjab & Sind Bank, and Bank of Maharashtra. The move is part of a broader strategy to privatise certain PSBs and enhance the efficiency of the banking sector through private capital infusion. Reports indicate that the divestment process could involve Qualified Institutional Placements (QIPs) or Offer for Sale (OFS) methods, with the government aiming to raise approximately ₹10,000 crore.

Rising Pressure on Employees
As part of efforts to demonstrate improved financial performance, IOB’s top management has reportedly set aggressive targets for branches and regional offices. Employees claim that the expectations do not take into account staffing shortages and resource limitations, making the goals unrealistic.

A cycle of intense work pressure has emerged, with superior officers passing down targets for gold loans, CASA accounts, deposits, and third-party products. Reports suggest that employees are facing increased monitoring through online meetings and performance evaluations, creating a stressful work environment. Some officials have been allegedly subjected to coercion and threats, particularly in meeting gold loan targets—an approach described as unorthodox and unreasonable by banking experts.

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Concerns Raised by Employees’ Unions
Bank Employees Federation of India (BEFI) has raised strong objections to the current working conditions at IOB. SS Anil, All India President of BEFI, commented on the situation. “The top management is under pressure following the government’s decision to divest shares in IOB by selling them to private parties. This pressure is being transferred to ordinary bankers in the form of unrealistic and illogical targets, which in turn is affecting their mental health and work-life balance. While opposing such anti-employee policies, we must also recognise that the root cause is the privatisation drive initiated by the central government. It is the duty of all bankers in the public sector, as well as the general public who rely on PSBs, to oppose this divestment move”, he told Kanal.

However, responding to questions on divestment and work pressure on bankers, R Balaji, General Secretary of the Indian Overseas Bank Employees’ Union (IOBEU, affiliated with NCBE), stated that both issues are separate. However, he expressed concern over the increasing incidents of worker harassment. Balaji cited a recent case in the Thiruvananthapuram circle of IOB that was resolved after employees’ organisations intervened with the management.

Devidas Tuljapurkar, All India Joint Secretary of the All India Bank Employees’ Association (AIBEA), remarked that the burden of improving a bank’s performance is often placed on ordinary workers. “The harassment of workers cannot be accepted under any circumstances. However, the divestment of IOB is not as critical as the further divestment of IDBI Bank, as the government’s control over IDBI Bank is being put up for sale”, he added. “The divestment of IDBI Bank will effectively hand over this crucial financial institution from the public sector to private parties”, Devidas told Kanal.

Future Implications
With IOB and other PSBs facing divestment, employees and unions continue to express concerns about job security and working conditions. The government’s stake sale is expected to attract interest from institutional investors, but questions remain about its long-term impact on employment and banking services. Employees’ unions have urged policymakers to reconsider the decision, warning that aggressive privatisation measures could undermine public sector banking.

The coming months will be crucial in determining the fate of IOB and the broader banking sector as the government advances its privatisation agenda.