Reserve Bank of India (RBI) Deputy Governor K C Chakrabarty on Tuesday said recruitment, skill upgradation and cultural adjustment would be the major challenges for public sector banks in the future. He said acquiring talent, retaining it and lateral recruitment at higher levels was the way ahead for these banks.
Currently, banks in India employ around one million people, of which, nearly 75 per cent are employed by public sector banks. Banks would have to recruit a large number of people in the next five-seven years, Chakrabarty said.
“The cozy banking environment is not going to continue for a long time. Acquiring talent would be important. If you don’t do that, you would be out of the competition,” he said, adding banks that would acquire people, nurture their talent and be able to retain them would be the ones to survive in the race.
Public sector banks are recruiting a large number of employees from management institutes, and, in some cases, offering better pay packages, compared to private sector ones. The RBI deputy governor said financial inclusion was the need of the hour for banks and campus recruitments would not serve the purpose. “Going forward, banking correspondents would be the driving force of the bank’s business, and we need people who would be willing to work at the ground level,” he said.
Public sector banks should open up to lateral recruitments, since banks are likely to face a talent crunch at top levels. “There would be a situation when only 40 per cent of the bank staff would be experienced,” Chakrabarty said. Therefore, skill upgradation and inculcating leadership qualities at all levels would be required to fill the gaps. He also said there was a need for banks to have a flatter organisational structure.