If we look at the developments of last quarter of 20th century we can observe that here was trust for reaching the banking services to the unbaked areas and to use the public sector banks as vehicle of development especially in the rural areas. Those efforts have improved the banking population in the country with an average one branch for about 15000 population. Bank nationalization, promotion of Orbs and LABS and establishment of Institutions like the ONBOARD, are some of the other developments during the era post nationalization of banks.
There was large scale recruitment of banking personnel to meet the above challenge during the latter half of asses and early asses. All those who Joined the banking sector during this boom of recruitment are either retired during last 2 years or are in the verge of retirement. It Is expected that about 15 % of banking personnel have retired during the last two years and another 20% are likely to superannuate during the next 2-3 years. This Is creating a large vacuum for skilled personnel In various levels of US banks.
Banks had virtually stopped recruitment for quite some time after the boom of asses leading lopsided succession plan . This has led to drying of feeder pipeline for succession in recent past. This situation has created a serious issue of succession in public sector banks. Present challenges To meet this exodus and to meet the expansion of branches, new generation of bankers Is entering the banks as clerks or officers. More than 50000 officers and clerks were recruited during the 2014 and similar number of personnel are expected to join during the next 2-3 years to fill the vacancies arising due to large scale retirements.
Though the recruitment process is handled end to end by Institute of Banking Personnel Selection (BIBS), the challenge is to train these new entrants to aka them Job ready initially and to prepare them to take up greater responsibilities in near future since there Is large scale requirement of Branch managers and Senior managers to shoulder the Branch level responsibility and leadership. Hence, there Is great challenge in training and skill development in banking sector in general and Sobs in particular.
The training needs To replace the personnel at front line desk and immediate supervisors, recruitment are done through competitive examination. Usual test and interview process continues to be the yard-stick for the entry for both officers and clerks. These new entrants come from different streams In graduation, not necessarily from commerce customer handling. At this level the training needs would be Basics of banking Communication Legal aspects of banking Customer handling skills Use of Banking technology The Probationary Officer may additionally require supervisory skills and working in teams.
Training these entry level clerks/officer is not that complex but the mammoth numbers is the major challenge. Present internal resources of facility and faculty in banks are not equipped to handle such volumes. These new entrants will be the face f bank as far as the customers are concerned. Unless these raw hands and faces are properly tuned to handle the customers, first causality will be the customer service and the business of the banks. In branches one can see either a very senior person in his late ass or a young face of early ass.
In between there are no middle age people who can groom these young entrants and hand hold them on the Job. This necessitates an efficient, holistic training requirement for this entry level personnel. The next level of hierarchy is the branch managers. Conventionally, managers were grown in work places after seasoning adequately at front office desk and rotating in different departments and branches. Officers used to learn the work by soiling their hands and getting prepared to manage a small branch.
But, in the present context, there is urgent need for branch managers due to retirements on one side and expansion of branches on the other. Banks are forced to post inadequately experienced young officers with 2-3 years of banking experience as branch heads. Skill sets required at this level are good management skill, goal orientation, analytical ability and men management exposure. Credit decision is another critical skill expected in the branch manager. These officers can hardly acquire these skills which require working exposure of at least 5-6 years.
This collapsed seasoning of officers before they are posted as branch heads can impact the banks. Banks run a great risk unless they are properly trained for the Job and monitored at the next level of hierarchy. This necessitates, branch management programmer in large scale, as never before. The next important level where succession issue is faced is at entry level executive positions in Chief manager and Assistant General Manager level. These positions are at large and extra-large branches where varied skills like credit, foreign exchange, risk management, HRS skills, marketing management are required.
Due to large scale retirement of senior bankers, banks have diluted the promotion norms and minimum service requirement is collapsed to get adequate number of eligible mangers to fill large number of vacancies at Executive level. These positions are filled by young, quickly promoted, less experienced Executives. Banks are nothing to blame since, positions have to be filled from available feeder cadre. Even terra recruitment can hardly solve this problem since qualified seasoned officers will move from one SSP to another and will not solve the problem inflicting this HRS issue of Sobs as a whole.
This level of executives require business development drive, quick credit decision ability, analytical ability and leading the team of young inexperienced ones. These entry level executives of Sobs are not able to create an impact due to various reasons: There is hardly much difference in the age group of learning also the sub-ordinate employees are in no way lesser accomplished Usual priority in knowledge and skill levels which senior colleagues/ managers usually command is non-existent due to collapsed seasoning in their previous cadres of these executives .
This is not to generalist that young unseasoned Executives lack the qualities at all. However, the stereotype is that they are perceived to be so. The confidence level cannot be high unless one knows his Job well and able to command and get the work done from his subordinates. Shear seniority of age was able to accomplish many of these managerial functions which the young Executive find it difficult to drive. This unenviable position of Banks needs to be corrected quickly through appropriate training and executive coaching.
We can even consider it as a damage control measure since this measure is required on an urgent basis. If the problem is allowed to continue it will have business repercussions on the banks. The training need of this young crop of Executives is multi-fold, considering their fast career progression and inadequate time given to them to get natural exposure and maturity. Though, these cannot be substituted by training and coaching, it will equip the young Executives with : The management skills
Leadership qualities Execution skills Men management Self development Team building Motivational skills Problem solving Negotiation skills The training module can be so structured that the trainer can act as a mentor and coach for a prolonged time to shape the young Executive into an accomplished Executive. The other important areas where training is required include, specialized banking areas like: Credit analysis Treasury operations Foreign exchange Risk management Marketing HRS area These specialized skills have to be developed in the new entrants who will be the torch bearers of the banks for tomorrow.
This requires concerted efforts of identifying and providing career path in the areas of specialization. The HRS policy of the banks itself may require revisit to facilitate building specialist cadres who can smoothly take the mantle from outgoing senior colleagues. Capacity building At this critical Juncture there is a proposal of merging the regulatory functions of Legislative Reforms Commission(FOSSIL).
The enforcement of micro prudential regulation and supervision and consumer protection laws relating to all financial firms and markets other than banks and payment systems would be entrusted to FAA. RIB has already realized the need for capacity building to meet the challenges and a Committee has been formed under the Chairmanship of Sir G Espaliering, Executive Director of RIB to find ways and means to develop capacity in skill development and innovation in banking. Presently, public sector banks face inadequate infrastructure and faculty to meet their mammoth task of major and radical skills discussed above.
Further, the training system in most of the banks are equipped to handle training for officers up to Senior Managers. Therefore, there is a need to strengthen the training infrastructure for Executives who handle larger chunk of over all business of the banks. Needless the mention the criticality of their decision making ability. Unless equipped they will be forced to take a decision with out adequate knowledge. As a consequence of the emerging needs, some credible institutions/ academies like Maniple Global, Bangor, Banker’s Quotient Academy,
Iambi have set up capabilities and capacities to meet the training demand of the financial sector in general and banking sector in particular. Apex level institutions like NIB and Indian Institute of Banking and Finance(lab) also provide training in a limited scale. Banks will be required to liberalism their policies to outsource the training. This will facilitate entrusting the skill building responsibilities with credible institutions. This will relieve the banks from training and skill building intervention which will dedicatedly be handled by the institutions which are managed and run by noir bankers.
Conclusion For the next one decade, public sector banks will be required to outsource the skill building of their employees to meet the challenge. HRS departments of banks may be required to draw proper plans for training in critical areas like credit, risk management, force, treasury and leadership positions. Additionally, succession plan has to be drawn based on the ground reality. In the light of the developments, RIB is expected to come out with suitable plan for capacity building in training. This will give new impetus and direction for training in banks.