**Executive Summary**
This document is an answer provided on Monday, December 1, 2025, to Unstarred Question No. 159 in Lok Sabha regarding local language proficiency in Public Sector Banks (PSBs). It outlines the steps taken to ensure PSBs provide effective customer service through local language proficiency, including recruitment practices, language training, and customer outreach initiatives.
**Key Points / Main Content**
* **Recruitment and Language Proficiency:**
* Customer Service Associates (CSAs) are recruited by PSBs state-wise through the Institute of Banking and Personnel Selection (IBPS).
* CSAs must pass a Local Language Proficiency Test (LPT) for the official language of their designated State/Union Territory.
* Banks have initiated recruitment of Local Bank Officers (LBOs) who must also undergo LPT and are posted in the State/UT for which they applied.
* **Training and Transfers:**
* Other officers are recruited on a Pan-India basis.
* PSBs conduct language training (online & offline)/workshops for these officers to develop communicative skills in regional languages.
* **Customer Outreach Initiatives:**
* PSBs undertake customer outreach initiatives, including customer service meets, door step banking facilities, utilizing the services of Business Correspondents, Call Centres, Grievance redressal framework, Feedback mechanisms, compliance with RBI directives on Customer Service in Banks, etc.
* These initiatives aim to enhance customer service standards and personal connections with customers.
**Impact Analysis**
**Public Sector Banks (PSBs)**
* **Impact:** PSBs are required to implement recruitment practices that prioritize local language proficiency for CSAs and LBOs. They must also provide language training for officers recruited on a Pan-India basis.
* **Action Required:** PSBs need to continue and enhance their recruitment processes and training programs to ensure staff proficiency in local languages.
**Customer Service Associates (CSAs) and Local Bank Officers (LBOs)**
* **Impact:** CSAs and LBOs are required to pass a Local Language Proficiency Test (LPT) for the official language of the State or Union Territory.
* **Action Required:** CSAs and LBOs must possess and demonstrate proficiency in the local language to pass the LPT and effectively serve customers.
**Customers**
* **Impact:** Customers are expected to experience improved communication and service due to increased local language proficiency among bank staff.
* **Action Required:** Customers can benefit from improved communication in their local language while interacting with PSBs.
Key Entities Referenced
Public Sector Banks (PSBs): Board-governed commercial entities that are the subject of the policy regarding local language proficiency.
Ministry of Finance: The government ministry responsible for the policy on local language proficiency in public sector banks.
Local Language Proficiency Test (LPT): A test CSAs and LBOs are required to pass, for the official language of the State or Union Territory (UT) where they are to be posted
Institute of Banking and Personnel Selection (IBPS): A Public Examination Authority involved in the recruitment of CSAs for PSBs, state-wise.
Customer Service Associates (CSAs): The employees who primarily deal with customer service functions at the front-end in PSBs, whose recruitment is state-wise.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES
LOK SABHA
UNSTARRED QUESTION NO. 159
ANSWERED ON MONDAY, DECEMBER 1, 2025 / AGRAHAYANA 10, 1947 (SAKA)
Local Language Proficiency in Public Sector Banks
159. SHRI VIJAYAKUMAR ALIAS VIJAY VASANTH:
SHRI MANICKAM TAGORE B:
Will the Minister of FINANCE be pleased to state:
(a) the steps taken to ensure that PSU bank staff in all branches, especially in southern and western
States, are proficient in the local languages to facilitate effective customer service;
(b) whether the Government plans to revise HR policies of public sector banks to give priority to local
candidates during recruitment and postings and include local language proficiency in performance
appraisals, if so, the details thereof;
(c) the measures being implemented by the Government to restore personal connect in banking, reduce
dependency on digital-only interactions and ensure customers can communicate in their own language;
(d) the plan to train existing staff and officers in local languages and monitor the timely resolution of
language-related grievances of customers; and
(e) whether the Government has introduced or proposes a mechanism to monitor Branch-level
compliance on language and customer service standards, with regular reporting to ensure accountability
and corrective action, if so, the details thereof?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) to (e): Public Sector Banks (PSBs) are board governed commercial entities. The customer service
functions at the front-end in PSBs are primarily dealt by the Customer Service Associates (CSAs),
recruitment in respect of whom is undertaken by the PSBs, State-wise, through Institute of Banking and
Personnel Selection (IBPS), a Public Examination Authority, in thirteen regional languages, in addition
to English and Hindi.
During the recruitment process, CSAs are required to pass a Local Language Proficiency Test (LPT) for
the official language of the State or Union Territory (UT), where the staff shall be posted. This facilitates
seamless communication in regional languages resulting in effective customer service.
Banks have also initiated recruitment of ‘Local Bank Officers (LBOs)’ for a particular State/ Region,
wherein these officers are required to undergo LPT as a part of their selection process and are posted in
the State / UT for which they have applied. This ensures priority being accorded to the local candidates
who are proficient in the local language in their recruitment as well as posting, thereby leading to
enhanced customer experience and satisfaction.
While CSAs and LBOs are recruited for a particular State / Region, other officers are recruited on a Pan-
India basis and are subject to transfer all over India. For such officials, PSBs conduct language training
(online & offline)/workshops, to learn communicative skills in regional languages.
Further, to ensure customer service standards and boost personal connect with customers including
addressing of service-related concerns, PSBs undertake various customer outreach initiatives such as
customer service meets, providing door step banking facilities, utilizing the services of Business
Correspondents, Call Centres, Grievance redressal framework, Feedback mechanism, compliance with
RBI directives on Customer Service in Banks etc.
***