UCO Bank’s “Zero Sanction” Show-Cause: Has Banking Reduced Employees to Just Target-Machines?

UCO Bank has issued a show-cause notice to one of its branch heads after the branch reported no sanctions under the Home Loan segment during the April–August 2025 period. The letter, dated August 13, 2025 and signed by the Zonal Head, Ranchi Zone, highlights “zero sanctions” as a matter of concern and cites it as a sign of “lack of initiative and poor business development efforts.”

The notice directed the branch head to provide a written explanation within three days, failing which disciplinary action will be initiated as per the bank’s rules. The language of the letter also terms the absence of home loan sanctions as “dereliction of duty,” escalating the issue beyond performance review and into the realm of possible misconduct.

The Bank’s Position
The communication clearly states the bank’s thrust on retail lending, particularly housing finance, as a crucial growth driver. Branches, especially those located in urban or high-potential areas, are expected to contribute actively to this segment. Management has repeatedly emphasised home loan sanctions as a key focus area, and the absence of progress is seen as damaging to the bank’s retail lending growth.

The letter warns the branch manager that their continued inaction, despite repeated instructions and facilitation, is “seriously impacting the branch’s contribution to retail credit growth.” It is within this context that the show-cause was issued, placing responsibility directly on the branch leadership.

Image: Show cause notice to UCO Bank Branch head.

Employees’ Concerns
However, employees see the situation differently. According to staff representatives, blaming individuals for “zero sanctions” does not reflect the realities of the marketplace. In several regions, demand for home loans has been subdued due to factors such as rising property costs, reduced affordability, and stiff competition from private lenders offering faster processing and more flexible terms.

Frontline bankers argue that in such circumstances, even aggressive canvassing and promotional efforts do not guarantee sanctions. “If customers are unwilling or unable to take loans, how can staff be held responsible?” asked one officer on condition of anonymity. 

Pressure of Target Culture
The notice has reignited discussions on the growing target-driven culture in public sector banks. Employees say that performance monitoring has increasingly shifted toward punitive measures, where non-achievement of numerical goals is equated with negligence or lack of effort.

Unions and staff associations have also raised concerns that such communications ignore genuine ground challenges and can have adverse impacts on employee morale. They argue that repeated threats of disciplinary action over business numbers can amount to mental stress, and in extreme cases, push vulnerable employees into mental health crises.

A Broader Question
The incident reflects a larger tension in the banking sector: balancing business growth with humane work practices. While banks emphasise profitability and lending expansion, employees emphasize realistic targets, adequate staffing, and supportive policies.

But the broader debate: should employees be penalised for market-driven outcomes beyond their control? is likely to continue in India’s public sector banking.