Decision to keep banks open on Sunday for LIC IPO turned out to be a damp squib, shows RTI response

While the government took the unprecedented step of keeping bank branches open on Sunday (May 8) for the initial public offering of Life Insurance Corporation of India, RTI responses show that just a few 1,000 applications were processed at the branches of some of the major public sector banks.

In the case of Punjab National Bank, as many as 10,088 branches were kept open on May 8 to process applications for the IPO of LIC, but only 833 branches processed such applications. In all, PNB had received 2,500 such applications on May 8. “All branches of PNB were opened,” said the bank in its response, adding that 9,255 branches processed zero applications.

Similarly, in Bank of India, 190 branches processed just 591 ASBA applications. In Ahmedabad zone of Bank of Baroda, 465 branches were kept open on May 8 and 999 officers and 15 clerks reported on duty on the day.

The queries under the Right to Information Act were filed by the RTI cell of We Bankers, which is a trade union of bankers. “… such arbitrary order was useless and caused huge losses to the exchequer,” the RTI Cell of We Bankers said in a tweet.

Speaking to BusinessLine, the RTI Cell of We Bankers said its team had sought information from different banks under the RTI Act on various parameters, including the total number of ASBA-enabled branches, the total number of branches opened on May 8 for LIC IPO, the total number of staff on duty on the day, the total number of LIC IPO applications processed through the branches on May 8 in the whole bank as well as the total compensation paid to the staff for working on the day.

Bank of Baroda’s Ahmedabad Zone said 220 officers had applied for a compensatory off for working on a Sunday. Bank of India did not share details of compensation given to staff working on Sunday. PNB said it has a policy on compensating staff for working on holidays and Sundays. “As such, no special instruction was given to compensate officers,” it said.

To encourage robust participation in the IPO of LIC, the government had directed all bank branches designated to process ASBA applications to remain open on both Saturday and Sunday (May 7 and May 8). The ₹21,000-crore IPO of LIC was fully subscribed on the second day with strong response from policyholders, employees and retail investors and lesser number of bids were received on May 8.

According to BSE data, the offer received bids for 29.08 crore shares by end of May 8 as against bids for 26.83 crore shares by end of May 7. Bank unions had at that time, also expressed their displeasure to the move. The All India Bank Officers’ Confederation (AIBOC) had also written to Reserve Bank of India Governor and urged him to revisit the decision to keep bank branches open on Sunday.

“…the decision to keep open all the branches will not yield any result rather impose huge financial burden which is estimated to be more than ₹100 crore on account of employee compensation and other operational costs to keep open the branches on a holiday,” it had noted.

Published on

June 28, 2022