Designing better compensation package for PSB execs: Vinod Rai

Designing better compensation package for PSB execs: Vinod Rai: Must at least be comparable to what their peers in private sector get, says Banks Board Bureau chief...

PSBs revamp

This refers to the report “Designing better compensation package for PSB execs: Vinod Rai” (The Hindu Business Line, April 21, 2016). It is comforting to
see that Banks Board Bureau (BBB) has got its priorities right under the able
leadership of Vinod Rai. If the BBB is able to prevail upon GOI and the
political leadership to provide a level playing field for PSBs as compared to
their private sector peers in managing their affairs, many of the present
problems in the banking sector will vanish. As there is no likelihood of
private sector banks improving their share in the banking business which is at
present less than 30 per cent, there is no option but to protect and revamp PSBs
to ensure their efficient functioning.
I had concluded my article "Talent Deficit in
Banks" published in the special issue of Business Manager with focus on
banking sector (BM, December 2012) with the following remarks*:
"HRD at the top across sectors should become a national priority, if professionalism is to be restored at lower layers which directly interact with the clientele. Guidance for an overhaul of HR practices in banks should come from GOI and RBI factoring in, among others, the following:
i) A long-term recruitment policy taking into account the skill and aptitude needs for rural, urban and metropolitan services
ii) Job security including social security to ensure that the employees develop a sense of belonging to the institution,
iii) An institution-specific wage structure up to junior management levels ensuring 'living wage' and incentives for performance, service in rural areas or tough terrains etc
iv) GOI and IBA should provide overall guidance in HR management, but leave details to individual banks who should be made more responsible for in-house management,
v)  Ideally, from middle management level and upwards, easier inter-organizational mobility of staff should be thought of,
vi)  An Institute for Financial Sector Management and an Indian Financial Sector Service could take care of further skill development needs at higher levels."

*Also see pages 38/9 of my 2014 book 'Banking, Reforms & Corruption: Development Issues in 21st Century India'
M G Warrier, Mumbai


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