Banking professionals lack skills to face new challenges: Arundhati Bhattacharya

The statement from the head of SBI comes at a time when small start-ups are offering more innovating banking solutions

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Banking professionals lack skills to face new challenges: Arundhati Bhattacharya
Arundhati Bhattacharya


At a time when banking sector is passing through a rapid paradigm shift, country's bank sector is finding itself woefully handicapped.

Banking professionals are today lacking in most of the skills needed to face the new banking challenges, indicated Arundhati Bhattacharya, chairman of State Bank of India, country's biggest bank, and one among world's Top 30.

There is little or no training being given on critical areas like ethics, understanding of risk and models needed to predict risk and many areas where technology is replacing humans.

"Above all there are soft skills as at the end of the day we are dealing with people and not machines on a shop floor. Not only that, we are dealing with one of the most sensitive areas of people's lives, their money. This is a very big area which we need to develop," she said in one of her last public appearances before her scheduled retirement on October 6.

The statement from the head of SBI comes at a time when small start-ups are offering more innovating banking solutions.

The foremost requirement for the new SBI is understanding of risks and compliance with new regulations like Insolvency and Bankruptcy Code or ever evolving NPA provisioning norms.

"Better understanding of risk and models that we use to predict risk is an area which is not very well taught or understood even today. We need much better knowledge of risk. Secondly, regulations are changing very quickly, and so compliance is becoming a matter of great importance. If you are not able to understand the nuances of regulations and not able to comply you expose yourself to a lot of risks," she said while inaugurating the State Bank Institute of Management.

The institute, at the upcoming city of Rajarhat near Kolkata, wouldn't be churning out probationary officers but future banking leaders.

"People who are going to be leaders of tomorrow in the industry are people who have to have proper kind of management knowledge. Just banking knowledge is not enough to provide leadership to the industry," she said pointing out that the word banking was consciously avoided in the name of the institute.

"Third is hugeness of the amount of technology we are using today, not only in areas like dealings in securities at a time when we are finding algorithms replacing dealers. Lot of analytics is being used to analyse who are the customers who can be offered certain types of products, to decide whether these products are the right fit at right prices."

As banks evolve from entities giving out loans to evolved organisations doing unheard of activities like replacing slothful management, there is need to understand ethics.

"What would be the ethics of doing things is an area where there is no overt training being given. Last but not least is governance standards. How do you ensure that you are taking care of every stakeholder and not only of a few stakeholders? "There are lots of areas today that I feel are not sufficiently covered in general management sphere. We, being the leader of the industry, need to show the way."

As for the financial health of SBI, Bhattacharya gave a mixed signal.

"We have reached the end of the cycle (for NPAs) and slippages would come down. There are also new sectors like telecom that are showing signs of stress but it doesn't mean the kind of the stress we saw in the past two years would continue this year as well. Things will definitely improve."

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