Management
consultants Mckinsey Company has prepared a special
report after surveying 14 leading Indian (public, private and
foreign) banks. The report stated that the Indian banking industry
has developed strengths in technology and distribution but
is behind in market capitalization compared to global banks.The
key challenge for Indian banks is the Manpower challenge, the
report predicted that to make Indian banks more accessible
to the general masses including the poor would alone need about
500,000 managers
Banks across India are hiring aggressively and
provides career opportunity to move up the career ladder fast.Indian
banks are expanding across the globe like never before. The size
of the growing Indian market and its integration with the global
economy make global expansion a critical prioroty for major Indian
Banks.At the same time, there are a lot of people exiting. Attrition
though is a universal problem prevalent across all industries.
Today, 15-20% attrition among the employees is true of most banking
institutions. To tackle this many banks have resorted to various
plans like stock options, performance bonus etc.-where employees
perform then there are ample rewards for every one. Stock options
have become increasingly popular as it fosters a sense of entrepreneurship
among the employees by giving them a stake in the business. In
banks today the pressure to perform is always there, but pressure
and hard work is always compensated by ample rewards. Banks have
also tied up with major institutions / universities to run certificate
course on banking thus increasing the available talent
pool .
PSU Banks are still maintaining over 70%
share of the banking business in India, but as compared
to the private banks they experience more margin squeeze.
Punjab National Bank will shortly open a branch in Hong
Kong, it has already got the license a to open a full service branch.The
bank has two international branches in UK and one in Kabul, with representative
offices at Dubai, Shangahi, and Almaty.
The
banking sector is heading skywards. The growth
has amplified the requirement for skilled professional that
understand the need of an evolving sector. The post graduate
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The year 2009 will mark the deadline
for BASEL II implementation for Indian banks (recently
extended by the RBI) and also foreign banks will have a full
fledged presence in India with no entry barriers.
New growth areas in Banking careers could
well be in the areas of rural credit, corporate credit,
project finance, consumer credit. In India today, corporate
credit is coming back strong and rural credit gaining
importance. There is a fundamental shift taking place in savings,
as the savings rate will increase as the economy grows. But
the savings rate of the individuals will change with the availability
of alternative avenues such as insurance, mutual funds, securitisation
s retail assets. Corporates toady have large surpluses and
bank deposit is gradually moving from retail to corporate sector.
The RBI is also expected to lift some of
the restrictions on foreign banks in the year 2009.
This greater freedom enjoyed by the foreign banks would lead
to greater competition. Many expect that foreign banks
with their huge capital resources and being more profitable
will more than a match for many Indian banks. Foreign banks
also are not only relying on the banking business as such ,
they have been quick to set up non - banking finance companies
(NBFC) , such as GE Capital and Citigroup- which had few restrictions
on branch expansion; as a result foreign banks and their NBFCs
are already active in consumer finance, credit cards,
broking business, investment banking etc.
Consider a career in a NBFC. NBFCs
are becoming increasing active and are giving a tough completion
to banks. Services which were previously offered by banks are
now being offered by NBFCs- take personal loans, insurance and various
other schemes all considered the forte of banks. The success
of Citifinanacial , GE Money in building large customer focused
portfolios and other companies such as M&M Finance, DBS Chola,
Sundaram Finance, Shriram Finance to name a few, have all
developed a huge asset base , giving a tough competition to the
banks. NBFC would always enjoy the advantage of having
lower overheads and low cost funds to maximise the value for
its customer base.
In the banking sector the latest buzzword
is rural banking or microfinance ( read
the vision of Professor Mohammed Yunus & how Grameen
bank was founded) - the finance ministry along with the
RBI is trying to implement a new model of rural banking.
Let us face it: For such a large country,
Indian banks are pygmies. ( Thanks to years of
protection) SBI-State Bank of India , India's largest bank
ranks 57th in 2006 Fortune rankings. With relaxation
of RBI norms one can expect a few takeover or consolidation
among Indian banks. RBI has extended the BASEL II implementation to
March 2008 for Foreign banks and Indian banks with global presence
and for rest MArch 2009 is the deadline. Companies
providing Credit Analytics in India (CRISIL, Inductis,
Fractal Analytics, Faor-Issac) are all sensing a bigger opportunity
.With the deadline for Basel-II implementation by the banks
(recently extended by the RBI) getting closer, companies offering
credit analytics would be in demand as internal teams to to
provide such services would be invariably costlier
than outsourcing the job to a third party service provider
. MNC banks like Citibank, NSBC etc. already have internal
teams to provide credit analytics but many Indian banks would
opt for third party service provides to bring down costs. Basel
II encourages accurate collection, analysis, management and
digitisation of data |
