Financial Daily from THE HINDU group of publications
Wednesday, Jan 16, 2002
Money & Banking
`Banks must outsource non-core work'
KOLKATA, Jan. 15
INDIAN banks will have to outsource non-strategic work in order to stay in tune with competition. Employees must concurrently be made free to concentrate on core banking activities, according to Mr Janki Ballabh, Chairman, State Bank of India. Mr Ballabh, whose speech was the highlight of Tuesday's deliberations at Becon 2001, maintained that such outsourcing would be a sure way of increasing the productivity of bank employees. The latter, as part of this strategy, should be particularly encouraged to carry on value-added services.
The SBI chief also laid down what he said were strategies to make employees more productive. The first step, he said, was to communicate the need for change throughout the organisation and commitment at all levels.
Reward, recognition and incentives to employees to perform better will send the right signals to the right quarters. This will ensure job satisfaction, boosting in the process employee morale and building commitment.
"There is no doubt that keeping employee skills updated enhances productivity. For imparting new skills, the training systems of banks need to be revamped so as to train maximum staff through training programmes at various locations", Mr Ballabh observed.
Raising the skill bar at the entry level would be yet another step to ensure that only skilled personnel get into banks. All these would help banks, especially public sector banks, to meet their goal of unleashing employee productivity.
Indian banks, at the same time, will need to become more customer-centric, offering a wide range of products through multiple delivery channels. According to him, banks should become proficient in managing assets and liabilities according to risk and returns.
They must also invest in technology for better MIS, product development, risk management and customer service.
The idea is to pay greater attention to profitability, including cost reduction and increasing fee-based income. ``The key to meeting these challenges lies in putting in place the necessary systems and skilled staff, training and equipping the workforce and making all-out efforts to motivate and retain staff with expertise," Mr Ballabh said.
He also underlined the need to ``merge e-contact with eye-contact'' in the context of public sector banking.
He further spoke on the need to have the right strategies for redeploying staff. In the immediate future in the aftermath of VRS staff will have to be redeployed from administrative offices and sent to work in branches so that customer service does not suffer.
Banks would further need to rationalise their office network for this purpose, he felt.
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