Mastering Vendor Selection and Partnership Management
Hrp for banking sector
1. HR Planning and Issues
in Banking sector
Presented by Presented to
Shubham Shukla Prof. B M Gourish
FPB 1517/070 Faculty of Human Resources
2. INTRODUCTION
• Over the last three decades, there has been a remarkable reforms in
the Indian Banking sector.
• The business profile of banks has transformed.
• The major challenge faced by banks.
• Integration drive has provided common platform for banks.
• However, the challenges faced in the HR front are numerous.
3. Evolution of Banking Sector in
India
• The banking sector was one of the most protected sector for five decades
• Since 1991 reforms there has been radical and perceptible transformation
in the operational environment of the banking sector
• It aimed at increasing the profitability and efficiency of the 27 public-
sector banks that controlled about 90% of all deposits
• The IT revolution is changing the way banking is carried out
• Banks are setting up alternative delivery channels to contain operating
costs like off-site ATMs, internet banking, telebanking, outsourcing.
4. PSU Banks-Definition
• Public Sector Banks (PSBs) are banks where a majority stake (i.e.
more than 50%) is held by a government.
• The remaining shares of these banks are listed on stock
exchanges.
• There are a total of 26 PSBs in India
5. Emergence of PSU Banks
• The Central Government entered the banking business with the
nationalization of the Imperial Bank Of India in 1955
• A 60% stake was taken by the Reserve Bank of India and the new bank
was named as the State Bank of India
• The next major nationalisation of banks took place in 1969 when the
government of India, under prime minister Indira Gandhi, nationalised
an additional 14 major banks
• This move increased the presence of nationalised banks in India, to
84%
• The next round of nationalisation took place in April 1980 when the
government nationalised six more banks.
6. HR planning
• Human Resource planning is a process by which the
management of an organization determines its future human
resources requirements and how the existing human resource
can be effectively utilize to fulfil these requirements.
• Banks have to suitably realign their existing human resources
• About 70% staff in each bank constitutes clerical and
subordinates staff
• Job redesigning and role restructuring is recommended at this
level in the banking system.
7. Why human resource planning
is important for Banks?
• Human Resource Planning is important for banks because banking is a
service industry
• Banking has been and will always be a "People Business". Though
pricing is important, there may be other valid reasons why people
select and stay with a particular bank
• Values such as "sound", "reliable", "innovative", "international",
"close", "socially responsible", "Indian"
• Those who do not meet the customer expectations will find survival
difficult in transparent situations with a high level of competitiveness
8. HR Issues/Challenges in Banking
• According to the Hudson report (2008)
• The critical HR challenges are hiring right staff, retaining talent,
staff, staff development, salary inflation, external threats, etc
• Other challenges are Changing working conditions, re-skilling,
compensation etc.
• Massive technology adoption programme
11. Comparison of Staff Expenses
• The above table suggests that PSBs are no longer the major
employment providers in the financial market
• Their per employee expenses have gone above that of Private
Sector Banks
• The staff strength of PSBs have gone down between 1998-99 and
2010-2011
• The competitive advantage in terms of staff costs that was thought
the PSBs had is no longer there
• The absence of the cost advantage coupled with the problem of
lower productivity makes HR reforms critical
