PSU Banks Prioritize Local Talent and Language for Better Customer Service

Public sector banks (PSBs) in India are refining their recruitment and training strategies to emphasize proficiency in local languages. This move aims to bridge demographic and linguistic gaps, particularly between northern and southern parts of the country, enhancing customer relations and service delivery at the grassroots level.

Finance Minister Nirmala Sitharaman stressed the importance of branch staff being fluent in the regional dialect of their posting area. She advocated for recruiting locally to improve communication with customers, which in turn fosters trust and operational efficiency. The goal is to ensure that even if top management is not conversant in local languages, frontline officers are equipped to engage effectively with clients.

PSBs like SBI are reviewing their appraisal systems to include language skills and local cultural understanding as performance criteria. This shift reflects the unique linguistic diversity of India, where 22 official languages coexist, necessitating customized approaches at individual branch levels.

Challenges remain due to the common practice of transferring officers across states, sometimes leading to communication barriers when staff are unfamiliar with local dialects. To address this, banks are organizing language training programs and providing resources for employees to quickly learn regional languages.

Several banks have begun emphasizing Local-Based Officer (LBO) recruitment, which prioritizes candidates from the same linguistic area to reduce language gaps. For instance, Punjab National Bank and Indian Bank have integrated language proficiency into their hiring and training frameworks.

These initiatives support the government’s broader financial inclusion goals by making banking services more accessible and personable. With over 55% of PSB staff in officer roles, prioritizing local talent ensures that banking services meet the diverse needs of India’s population.

By adapting human resource policies and embracing local languages, PSU banks aim to strengthen customer connect, improve satisfaction, and build lasting relationships across remote and multilingual regions.