Staff shortage hits Pvt. banks

Attrition, Limited talent pool takes its toll; Salaries Witness a steady climb

INDIA'S private banking segment may well be growing at a fast pace but bankers are now encountering problems of attrition and inadequate manpower.

Over the last few months, bankers have been finding the going tough at a time when some of the foreign banks have been expanding their private banking business. Given the shortage of trained manpower for these operations, salaries have grown by close to 25 to 30% annually.

Says ABN AMRO Bank's country representative Romesh Sobti "There is a paucity for trained manpower. There is a limited pool in the industry and so there is movement happening between the players. Salaries are also going up." The problem is more acute in some of the other metros like Delhi and Bangalore.

"Other than metros it is very difficult to get people as supply is limited. There are not enough people with advisory and relationship management skills as the market is not deep." says Sharad Sharma head of private bank BNP Paribas.

Some foreign banks had been hit badly as they have lost 20% of their employees. These banks have around 20 to 30 people in private banking and last year most of them have seen four to five of their staffers leave on an average. ABN Amro Bank, BNP Paribas, and Deutsche Bank offer private banking in India other than private sector banks like HDFC Bank and ICICI Bank. Other players like HSBC, Citi, StanChart and ABN Amro offer high end retail banking which straddles between mass retail banking and private banking.

Manpower problems are commen in these segments. Players like Citi, HSBC and JP Morgan are looking at offering private banking in India while new players like UBS are also looking at entering the country.

In the private banking segment, a staffer who joins normally makes the progression from arelationship manager to a financial advisor and then to a private banker.

Bankers are adopting different methods to surmount the problem of attrition and the paucity of manpower. Some like ABN Amro are creating a pipeline. They are also picking up people from other segments like debt and equity capital market, mutual funds and insurance companies.

Others like BNP Paribas are promoting people from their own ranks to go for programmes like CFP and capital market programmes other than fresh recruitments

Private sector banks are not as badly affected as the foreign banks. Banks like ICICI Bank have one of the highest strenght of around 200 people which they plan to grow to more than double the strengt.

Source : The Economic Times, 19th March 2005.