NCBE Opposes Engagement of Apprentices in PSBs; Concerns Raised Over Job Security and Fair Employment Practices

The National Confederation of Bank Employees (NCBE) has expressed strong opposition to the engagement of apprentices in public sector banks (PSBs) under the Apprentices Act, 1961. In a letter to the Indian Banks’ Association (IBA), NCBE highlighted concerns regarding job security, fair wages, and the potential misuse of the Act.

Opposition to Apprentices in PSBs

NCBE has raised objections to recent apprentice recruitment drives in banks such as Bank of India, Indian Overseas Bank, and Bank of Baroda, which have collectively announced the hiring of over 5,000 apprentices for the financial year 2024-25. The union argues that this move undermines the rights of regular employees and replaces stable employment opportunities with temporary positions.

(The letter from NCBE General Secretary L Chandrasekhar to the Chief Executive of IBA.)

Misuse of the Apprentices Act

The letter points out that the Apprentices Act, 1961, was primarily introduced to support Micro, Small, and Medium Enterprises (MSMEs) in skill development. NCBE contends that PSBs, which require a highly skilled and knowledgeable workforce, should not use this Act as a means to circumvent standard recruitment processes.

No Skill Gap in the Banking Sector

According to NCBE, there is no significant skill shortage in the banking sector that justifies the engagement of apprentices. Any workforce gaps are attributed to inconsistent recruitment policies rather than a lack of trained professionals. The letter emphasises that banks should focus on systematic hiring rather than temporary staffing solutions.

Threat to Job Security and Fair Wages

NCBE argues that hiring apprentices on a short-term basis threatens job security for aspiring banking professionals. Apprentices under this scheme receive stipends ranging from ₹10,000 to ₹15,000, significantly lower than entry-level salaries in banks. Additionally, as per the Apprentices Act, employers are exempt from providing benefits such as Employee Provident Fund (EPF) and Employees' State Insurance (ESI) to apprentices, further reducing employment security.

Also Read: Thousands of Bankers Unite at Jantar Mantar, Raising Voices for Their Rights

Concerns Over Exploitation and Service Quality

The NCBE has also warned against the exploitation of young professionals who may be employed on low stipends without any long-term career prospects. The letter states that banking roles require extensive training and commitment, which cannot be achieved through temporary apprenticeship arrangements. There are also concerns that involving apprentices in core banking functions may compromise customer trust, financial security, and regulatory compliance.

Potential Risks to Data Security

Another major issue raised by NCBE is the potential risk to data security. The letter highlights that financial data is now considered more valuable than money, and entrusting banking operations to temporary apprentices could increase the risk of data breaches and loss of sensitive information.

‘No Room for Apprentices in Post-digitalisation Era’ 

L Chandrasekhar, General Secretary of NCBE, emphasised that the engagement of apprentices in public sector banks is impractical given the highly digitised nature of banking operations. Speaking to Kanal, he stated, “The trust in banking is all about keeping the secrecy and confidentiality of customers’ accounts. The apprentices are not authorised for digital procedures. Neither the permanent employees can share their passwords.” He further pointed out that while the Apprentices Act, 1961, was originally meant for industrial training, its extension to the financial sector does not align with modern banking practices, making apprenticeship programs unsuitable for the industry.

(Circular from AIOBEU opposing engagement of apprentices in IOB.) 

Majority Union Raises Objection in Indian Overseas Bank 

The All India Overseas Bank Employees' Union (AIOBEU), affiliated with NCBE, has also voiced strong opposition to the engagement of apprentices. In a circular dated 01 March 2025, the largest union of workmen in Indian Overseas Bank highlighted, the bank has announced the recruitment of 750 apprentices, raising concerns about the contractualisation of permanent jobs. The union pointed out that apprentices will not be covered under labour laws or bipartite settlements and will have no assurance of future employment.

AIOBEU also criticised the stipend offered, which is lower than the government-mandated minimum wage, and questioned the feasibility of training apprentices in an already overburdened banking environment.

NCBE has urged the management of PSBs to reconsider this practice and instead prioritise permanent recruitment to strengthen the workforce. The union demands the immediate withdrawal of advertisements for apprentices and a commitment to hiring qualified candidates through standard recruitment channels.

NCBE has requested an official response from the IBA regarding their concerns. The union remains committed to advocating for fair employment practices and the rights of banking professionals.