‘Private banks must focus on retaining and managing talent’

The “work culture” in some private sector banks was brought into sharp focus by a top central bank official on Thursday.

According to Harun Rashid Khan, Deputy Governor, RBI, the way the work culture has evolved in some of the private sector banks could lead to reputation risk for them.

Speaking at the ‘Banking, Financial Services and Insurance Conference’ organised by SBICAP Securities, Khan said that banking has become a hated profession among some youngsters. The RBI Deputy Governor’s observations are significant as they come in the backdrop of a large private sector bank reportedly issuing pink slips to about 1,200 employees. Referring to the 4Ps in banking, Khan said if a bank has excellent products, excellent processes and excellent partnerships, but not the people, then all its efforts (to grow business) will fail.

“The age of lifelong loyalty to an institution is gone. So, banks have to constantly churn people…How you retain and manage talent (in terms of compensation and motivation) is something that has to be focussed on by the top management,” said the Deputy Governor.

Bankers say that in the dog-eat-dog world of banking, some private sector banks have set unrealistic targets (related to deposit growth, sourcing loans, bringing fee-based business, and reducing bad loans) for their employees to achieve.

When they fail to meet the management’s expectations on the targets, the employees are coldly weeded out. This could lead to a situation where youngsters will not look at private sector banks as a long-term career option, bankers said.

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