Banking Article, Banking Finance 2021, Banking Finance July 2021

Professionalising Bankers

The recent failures of  LVB, Yes Bank and PMC have  underlined the need for managing banks professionally at all levels from the counter clerk to the manager. The performance of a bank is the sum total of the collective performance of its branches and the performance of branches is gauged by the performance of its workforce in key performance areas such as deposits, advances, profits and containment of non-performing assets. Banking is primarily an intermediation between savers and borrowers of the society and management of humans is central to banking. A successful bank presupposes the availability of abundance of professional bankers.

A professional banker is one who is good at relationship-building and business development, as opposed to a bureaucratic banker who works within rules book which hampers business growth and a businessman banker who is reckless in lending and is hungry for taking blind risks. A professional banker is expected to be a well-roundedbanker and a blend of achartered accountant, lawyer, computer-literate, economist and an expert in behaviouralscience, all rolled into one to discharge his role effectively.

 A job profile of a professional banker in the technology-driven banking era requires him/her to possess thefollowing competencies to enable him/her to perform well in key performance areas such as resource mobilisation, credit deployment, profit generation, good housekeeping and complaint-free customer service.

A professional banker should be competent to perform the role assigned to him. He/she is required to possess academic and technical competencies.

Academic competencies

  • Good understanding of broad spectrum of financial sector with reference to products, processes and performance
  • Good understanding of regulations and their impact on business decisions
  • Good understanding of individual customers in general and corporate customers in particular for business development and relationship building

Technical competencies

  • Ability to understand customer needs
  • Ability to drive and implement change in operational environment
  • Business development and sales skills

Competencies for a banking professional

Knowledge in Skills Values
Risk Management

Foreign Exchange

Credit Appraisal

Banking Practices

Legal aspects of Banking

Monetary Economics

Analysis of Financial Statement

 

 

 

 

 

 

Business thinking

Decision making

Applying judgements

Managing quality standards

Getting things done through subordinates

Customer Experience

Team management

Individual management

Learning

Listening

Innovation

Support

Collaboration

Transparency

 

Role of Indian institute of banking and finance

Indian Institute of Banking and Finance is a professional education institute, promoted by commercial and,co-operative banks with a mission to develop professionally competent bankers primarily through education, training , examination and continuing professionaldevelopment. The institute offers a bouquet of academic programmes .JAIIB ( basic level) and CAIIB ( advanced level) are the flagship programmes offered by the Institute and any bank .employee who completes JAIIB and CAIIB are considered to be professional bankers. The number of bank employees who appear for these examination are also on the rise year after year thanks to increments offered by banks to bank employees for passing JAIIB and CAIIB examinations. Weightage in promotion to higher levels is also given  to JAIIB/CAIIB holders.

The subjects of JAIIB with three papers and CAIIB with another three papers are not tailored to practical orientation and are too bookish and needs a through revamp and the syllabus is also out –date and is divorced from current banking realities.For example ,it contains units like share issue in Accountancy paper where book-keeping entries still follow the  practices of the eighties and nineties where as the market practice for issue of shares has undergone a drastic change. The syllabus revision took place last time in the year 2005 and some minor changes are done in the syllabus over the years. By and large ,the syllabus does not measure upto the exacting standards required of a professional bankers. One reason could be that the syllabus is normally designed by a committee comprising retired bankers at the level of AGM/DGM who are readily available for such an exercise and a few middle management serving professionals.Views from the stakeholders such as  bank employees, human resources development departments of bankers, ceos of commercial banks,  a cross section of customers such as depositors ,borrowers and others who avail of banking services may be sought and examined by the syllabus revision committee for necessary changes in the syllabus to suit diverse requirements in banks.

The examination system needs to be perfected and the questions should be designed to test the bankers on practical aspects with actual case studies and currently even   MBAs/CAs fail in papers like Accounting and Finance because questions are not germane to the practical banking aspects.  The  Institute ,instead of offering mark-based  theoretical banking papers  , may offer a plethora of modular programmes on different aspects of banking such as risk management, Basel III, NPA management, SME Lending  ,Rural Financing,  Export and Import financing, NRE Accounts etc to name a few , and offer credits to each programme with minimum qualifying standards instead of marks for having passed the moduleand a student  who secures  ,say,12 credits may be awarded the professional certification. More than ninety percent of the bank employees are into retail banking and they should be allowed to choose 12 modules from a multitude of modules which are relevant to them in day –to – banking and will help them to climb a career ladder. Currently,most of the modules are too theoretical and has no relevance to day- to -day banking.

Role of Staff Training Institutes

Although allbig banks do have an apex staff college for senior level bankers and staff training institutes at different centres across the country for all cadres vis substaff/clerical/officers, they offer run of the mill programmes like induction courses, refreshercourses, capsule courses and the training methodology also is not trainee- friendly. The programmes aim at enhancing knowledge and sharpen the skillsets of employees but more often the training programmes follow a set pattern introduced years ago. For example, no improvement is seen in documentation even after bankers undergo training programme on documentation. The inspection reports of branches point out a lack of concern for perfect documentation with many defects in documents like understamping, etc. Some banks do offer e learning programmes and on line training and the efficacy of such programmes are yet to be studied by many banks.

Today’s banker needs to be equipped with competencies which can be imparted only if the professional institutes like IIBF, NIBM, Staff Colleges of big banks etc should pool their resources together and the cross fertilisation of ideas would strengthen the training delivery system. IIBF and the banking industry should have a formal mechanism for frequent interaction so that the professional needs of the industry can be met   and qualitatively improve the academic inputs. It can also replicate the best practices being followed by overseas training institutes like American Bankers Association, Institute of Scottish Bankers to develop the competency of bankers. Competency here denotes the ability of bankers to perform according to a desired standard.

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