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Anjali Prayag

With Banking Services Recruitment Board being abolished in 2001, and the finance minister directing each bank to draw up its people profile, what are the options available for banks and how are they working out their HR profiles?

There's a lot happening behind the bank counters. Public sector banks that had closed their recruitment doors after the exit of their VRS optees are shaking the dust off their recruitment files once again.

Most PSU banks have started working on their manpower planning exercise. With the finance minister abolishing the BSRB (Banking Services Recruitment Board) in June 2001 and directing each bank to draw up its people profile, there are various options available before the banks.

What are these options and how are banks working out their HR profiles? And what are the problems associated with lateral recruitment in banks where there's already a pool of officers working? Some insights into the issue.

Sitaram Murty, Managing Director, State Bank of Mysore, like many of his ilk has a different outlook now.

"We are looking at a different type of people." And how does he classify this `different' group? He explains that earlier banks were recruiting generalists, now they will be focussing on specialists.

In addition to this, SBM will also help its existing employees upgrade their skills by giving in-house training for various assignments like treasury management, credit appraisal, risk assessment, etc. SBM has already recruited law officers, engineers and computer professionals, but Murty feels recruitment activity will pick up six months from now.

In the Indian banking industry, three things happened simultaneously that veered the recruitment drive in this direction.

One is globalisation and computerisation, the second is the exit of generalists with the VRS and the third is the empowerment that the banks obtained from the Finance Ministry to recruit in a manner that suits each bank's needs.

M. S. Kapur

Like Murty, M.S. Kapur, Chairman and Managing Director, Vijaya Bank, has similar plans for his bank. This bank has also started working on its human resource profile.

Kapur says among the specialists he will be looking for are marketing, foreign trade and technical personnel. "Definitely MBAs and CAs, in addition to software engineers and other finance specialists."

Recently State Bank of India Chairman, Janaki Ballabh, announced that the bank would make a pitch for talent at campus recruitment programmes. He also stressed the need to employ the talents of MBAs in finance and marketing.

Lateral recruitment, though few and far in between, has happened in the past. Central Bank of India, for instance, recruited CAs in a big way in the 1970s.

Almost every zonal manager or general manager in this bank would be a chartered accountant, says a veteran banker.

Indian Bank plans to recruit around 200 specialist officers — including chartered accountants, lawyers and other technically qualified professionals. This is expected to be complete before March 2003.

As for IT, though this is an ongoing process, because of the level of computerisation and networking that banks are getting into, this area will see some more action.

Not very easy

Now that all the banks are thinking on similar lines, what happens to the salary factor? Are these banks in a position to afford fancy salaries quoted by management graduates?

This is especially relevant in the light of the fact that there is already a pool of officers at a scale already defined by the government.

Although the heads of the banks are apparently optimistic of the mixed group that they plan to have, employees are still by and large wary of lateral recruitment. Many banks that had met the parameters of good financial health laid down by the government were given recruitment autonomy — which included the power to recruit laterally. But they seldom exercised this right.

Even instances where they have recruited laterally, a little probing shows that it is in the rarest of cases — and even that restricted to specialised fields such as information technology and law.

Some Chennai-based bankers expressed their misgivings concerning salaries while recruiting MBAs. One bank manager said, "This plan may not be a workable proposition as the pay scales being offered to them will not be attractive.

An MBA from the Indian Institute of Management or the second tier of top institutes would expect salary levels of around Rs 5-8 lakh per annum whereas most nationalised banks would be able to offer a salary package of around Rs.2 to 2.5 lakh (which is half that amount) at the entry level."

SBI needs at least 600 officers. Ballabh had announced earlier that "a management graduate at entry level would be paid around Rs 4 lakh per annumplus perks and the opportunity to work in a global environment."

It follows that if the bank feels the need for a professional, it would be ready to pay a price and concede to paying a higher salary than the existing employee. But what about the HR problems this would create within the banks.

This situation was explained by a General Manager in a Chennai-based bank, "I am earning around Rs 30, 000 per month. My Managing Director may earn slightly more — say around Rs 35, 000 - Rs 40, 000. How will an MBA who may demand around Rs 50, 000 per month feel about reporting to me? For that matter, imagine what my feelings will be?"

Finding a solution

Some banks like the Indian Bank have got round the problem by hiring MBA students just during their summer vacation, as interns. By doing this they get to use the talent — their finance and marketing skills and the bank promotes its products at a fraction of what it would have cost if these MBAs were hired after graduating.

Ranjana Kumar

Indian Bank took on 265 MBA students during the summer months April-June 2002 and placed them across the country to market its various deposit and credit products. The experiment has obviously been successful. Ranjana Kumar, Chairperson and Managing Director, Indian Bank, says these interns were able to bring in about 40,000 clients during this year.

In the previous year, when a similar exercise was conducted, the students notched up around 59,000 clients for the bank. "Even apart from the sheer numbers, an awareness of the bank and its products has been created," says Kumar.

Another indirect benefit that the bank — which has gone through a difficult time — got is a change in its image. It conveyed a `youthful and dynamic' message to the customers of the bank, which was an added benefit.

Murty of SBM explains why they need the specialists. Liberalisation and deregularisation has meant that an array of products is available to the customer.

In addition, the officers need to have knowledge of the global situation.

It's also well known that earlier bank officers were used to walk-in business. It's no longer so. "Now we have to get regular business, it cannot be an ad hoc affair," he says, adding, "you need marketing skills and knowledge at all levels. At the junior level, it is important to service the business. The officers have to market our products and services."

In the finance area, the banks would need skills of a higher order in asset and liability management, treasury management, foreign exchange, credit appraisal, risk assessment and in technology, technically qualified people who can operate, maintain and upgrade software and hardware will be in demand.

"It's not that the existing people cannot handle some of these assignments. There are some bright people whom we have identified and trained for these jobs."

Murty is very clear that not all of them will be outsiders. "A majority of them will be trained in-house. We have some good staff in the clerical grade, who will be identified and promoted. For instance, we have had some operators who have become computer programmers."

In-house training to upgrade the skills of the existing employees is a factor that cannot be ignored. Kapur says Vijaya Bank has already set the ball rolling in this direction.

"Our training centre in Jalahalli, Bangalore will take care of these needs of the bank."

At Vijaya Bank, some clerks will also get promoted as officers. In five to six years, they will be on par with the officers and will have a good career path, but what we need is specialists to improve the business image of the bank.

Indian Bank has also identified around 150 of its officers internally to concentrate on marketing its products, an area which has been neglected in the past, according to Kumar.

She says that these officers would be trained and posted in major metropolitan areas to beef up the bank's retail and corporate portfolio.

What about VRS employees? Will they have an opportunity to get back into the stream? Murty says this is difficult as "we have an unwritten rule that people who have benefited from the VRS cannot apply in other PSU banks."

Ironically many of the young VRS optees have enrolled for courses that would qualify them for the jobs that these banks are looking for.

Says Srikanth (second name withheld on request) who opted for a VRS from Syndicate Bank and enrolled for a finance course from ICFAI, Hyderabad.

"Now, I'm qualified to work in one of these banks, but cannot go back." These people have also realised that there is a drying up of freelance work.

Murty suggests they can start training people for PSU banks, like in the insurance industry.

Another area that the banks are still working on is the right mix of freshers and people with experience from the other sectors. Kapur says lateral entries will be from other related sectors, not necessarily from the banking industry.

Murty points that retail and agri areas are going to be thrust areas for banks in the future. "We will need people who have a flair for rural banking. They should be willing to work in all places."

The role of the bank also will change in the near future. For instance, SBM plans to take up retailing of government securities and marketing insurance products.

"The investment potential of our customers has not been fully tapped. We have the customers at our doorstep, all we need to do is give him various options."

The bancassurance concept will soon catch up and bankers will become more of portfolio advisors to depositors.

As the bank manager's role becomes even more crucial, in this transition process, HR will play an important role, feels Murty. "The success or failure of the bank will depend on the people element," he predicts.

The change process

Probably no other industry in India would have seen so much happening on the HR front as IT and banking. In the former, the rules of the game were always clear, and most of them were formulated abroad and simply followed here.

But the banking industry has a homespun HR history. Considered a haven by all middle-class Indians mainly because of its `stability and security', the industry first shook off this image with its VRS option. Now with most PSU banks throwing open their doors to campus and lateral recruitment, insecurity is ruling again among its employees. What will happen to the pool of officers already servicing the industry? What are their fears and apprehensions? Shantha Raju, General Secretary, All India Bank Officers' Association, says, "A high-powered committee of Indian Banker's Association made a number of recommendations where they advised infusing fresh blood in the system. The banks have said that these would comprise 25 per cent of officers. The break up of officers in a bank would be something like this: Lateral recruitment: 25 per cent, promotion based on merit: 25 per cent and promotion based on seniority: 50 per cent." He says some banks want to increase this percentage of outsiders, which the union is opposing.

He says respective banks with their unions should discuss what direction should the bank take and take steps accordingly. Another issue is "can we can afford what the MBAs expect in terms of compensation?"

Shantha Raju recommends that there should be a specific scale for all officers and only for certain specialists, maybe for a couple of people, there may be some differences in compensation for the additional skills they may possess. "There will be a larger number of people with lesser salary. We are opposing this, as it will create resentment among the officers and work may get affected. We are trying to convince the members of the union also that some specialists should be paid more for their talent."

And even the increase from 25 per cent that some banks plan to have should be done in a phased manner, he recommends. Another problem that banks may face is that of quick turnover. Most MBAs change jobs after a couple of years, which may prove to be costly for the banks.

"SBI is also seriously considering taking these new recruits on contractual appointment for three years and confirming after that period. That way the commitment also will be more. Otherwise these MBAs will not stay for more than a couple of years," says Shantha Raju.

Picture: Shaju John

With inputs from N.S. Vageesh

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