New Kids on the Banking Block
others are being lured with the concept of wealth creation
by means of ownership of the firm.
While this is likely to create some disruption in the
banking, IT, telecom and e-Commerce space, but this may
not dent much of the established talent management
programs that each of the large and successful banks and
NBFCs run. This is just the start-up phase and the true test
is yet to come as these new banks could potentially pose
a talent challenge to not just the banking system but
also the larger ecosystem. Today, most of the established
banks, NBFCs and conglomerates face severe challenges
in hiring "ready" talent in the rural and semi-urban areas.
With these new entities running in full steam, it is likely to
stress the talent market even further and even see influx
from other allied retail and distribution industries. This
brings in the necessity of having a defi ned succession
planning program for all key and critical position.
Capability building is another focus area for banks
given the talent catchment is varied across multiple
industries and geographies. To be able to run an effi cient
and homogenous organization, targeted development
programs could come in handy for the new banks and
they may choose to follow the "academy approach" like
their "big brothers".
Another challenge staring at these new banks which
they are likely to face in years to come is diff erentiation.
The ability to diff erentiate performance and thus align
rewards is critical to promoting an overall performancebased
culture. Large banks have often being accused of
being socialistic in their approach while managing pay
and this has come back to haunt them in the long run. It's
extremely important that these new banks adopt a stateof-
the-art performance management system and follow it
rigorously so that they don't fall prey to similar issues in
the years to come as they plan to expand.
Let the Games Begin
Will Raghuram Rajan be able to do for the Indian
masses what Muhammad Yunus achieved in neighboring
Bangladesh? Too early to tell. But the seeds seem to have
been sown for leveraging fi nancial institutions to drive
economic empowerment for the unbanked segments of
the country. And this in turn, has certainly provided the
shot in the arm that the banking sector was waiting for.
It is pretty evident that these new banks have their
hands full on all fronts - especially on people-related
matters given it is an essential element which can either
learnt and while they have their bigger banking brothers
and powerful pioneers to seek experience from, they
will have to balance out the temptation of filling up a
larger than life banking canvas that is no doubt coveted,
and the realities of making the business model work in
a punishing market. Money is always pivotal in a bank's
DNA, both as a raw material and as a reward, and it will
be critical to see how these new banks manage that
sensitive subject. There are many dimensions of HR that
will require focus right from the organization design
and grading structure to the performance management
system and payout mechanism; it is important to divide
them into what is required upfront to hit the ground
running and what will come in later; and what will
eventually help them move from good to great. Passion
and perseverance has got these chosen few the coveted
license; patience and prudence will make them the
preferred pioneers of economic change in the country, as
they usher in a regime of sustained fi nancial inclusion for
the nation at large.
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