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All in a day’s work
Updated: August 11, 2015 02:59 IST | Hema A. Krishna
Cultural lessons on India are often best learnt by observing how the service industry addresses the needs of customers.
I left for the United States in 1989 to pursue my doctoral studies. Since 2010, I have been visiting India every summer to spend time with my parents, and have been amazed by the rapid transformation of this nation over time.
During a recent visit, I accompanied my father to his bank branch on numerous occasions. The booming Indian economy coupled with the increase in the proportion of middle-income senior citizens who conduct their transactions in person, in the morning and afternoon hours of the day, have seriously strained the customer service function of the industry. What is remarkable is that even amid the chaos and confusion, all the customers’ needs are met. The U.S. may be seen as a role model in customer service in general, but the number of transactions in that country’s service industry as a whole pales in comparison to what we witness in India.
During a typical 30-minute visit to the branch in Coimbatore, I observed that 20 to 25 customers deposited or withdrew cash. This function was handled by three staff members with speed and accuracy.
Four customers (most of them senior citizens), opened, closed, or renewed their fixed deposits: evidently, they supplemented their monthly pension with the interest earned from fixed deposits. Many of them brought their spouses along, perhaps to ensure that another pair of eyes would check for the accuracy of the transactions. I also noticed two customers who visited their lockers to take out or deposit jewellery, or check whether their hoard was intact! India has the highest per capita consumption of gold, which is lavishly displayed during weddings and other social occasions. Two customers came in for foreign exchange transactions (to convert dollars to rupees). Both were arguing furiously with an employee seeking better exchange rates, even as the latter tried to explain that they had no control over the rates! Finally, there was one customer who came in for a housing loan. An employee told me it was just a normal day. These functions were all handled by a total of four staff members.
In contrast, in my U.S. bank, during a 30-minute span approximately 10 customers are likely to withdraw or deposit cash from the automated drive-through counter, and four to five are likely to enter the premises and have the service performed by one of the four cashiers. In my 22 years in Cincinnati, I am yet to see a customer open his or her locker. Nor have I seen any customer coming in for a foreign currency purchase. On rare occasions I have seen one or two customers meeting the staff (three employees excluding the cashiers) for advice on fixed deposits (CDs) or for a housing loan. The atmosphere is eerily quiet, and whenever I walk in the staff members are happy to see me — because there is someone to lift them from their boredom.
I have concluded that the employees in India who I watched have advanced degrees in multitasking and patience, since they were able to provide the service despite a number of constraints. I noticed that no customer was willing to wait. When one employee was busy attending to the needs of a customer, the latter did not think twice about interrupting other employees who were busy with their own customers.
Coffee was served to high-value customers. Thankfully, an errand boy took the order, saving the employee the trouble of running to the store next door to get the coffee! One employee was on vacation, and his/her official and personal calls were being addressed by the ones on duty. During the 30 minutes, I noticed that the employee who was handling my father’s transactions had to respond to four phone calls which were meant for the absent staff member. Each call lasted about two minutes and the conversation included sharing details of the absence, as we watched. Also, the branch manager popped in a number of times even as the employee was in the middle of a conversation with my father, for photocopying work. Since workplaces in India are quite hierarchical, she immediately rose from her seat to carry out his request.
The pattern I saw here is typical of a democratic transitional economy. Tier 2 cities such as Coimbatore are more likely to witness this style of functioning in Indian banks.
U.S. bank employees do not face any of these constraints, since customers are willing to wait for their turn (assuming there is a queue) and will never cross over to another staff member for advice. Also, there is a self-service coffee counter for customers.
My biggest takeaway from this experience was that despite the many interruptions and the huge volume of work handled in the branch, customers received very good service. My second takeaway was that a visit to a bank in India can be truly entertaining!
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The author is Professor of Strategy and Global Business, Williams College of Business, Xavier University, Cincinnatti.
Unfair, unjustified’ step: bank unions-The Hindu Business Line-17th August 2015
August 17:
Bank unions are not happy with the government’s decision to induct two CEOs from the private sector at two top public sector banks. The government had announced on Friday that PS Jayakumar and Rakesh Sharma would be appointed MD & CEO of Bank of Baroda and Canara Bank, respectively. This was being done as part of a package of measures called ‘Indradhanush’ to revive the banking system.
CH Venkatachalam, General Secretary, All-India Bank Employees Association, has called the step “unfair, unwarranted and unjustified”. He said these banks were huge financial institutions with social and public welfare orientation. That culture doesn’t fit with what these private executives bring to the table.
He said that there was no need for such appointments when there were enough committed, dedicated executives within public sector banks. This sends a wrong signal that the government is committed to privatisation of banks.
The move to provide higher performance bonus for MDs and CEOs did not find favour with him, either. He asked, “Why should only the Chairman or CEO get such performance bonus? After all, it is team work. Why not extend that to every one?”
He wondered why the package of measures announced on Friday did not include a single mention of how the banks were to recover the money from defaulters.
Why the decision to allow private sector honchos to head 2 PSBs is bold but risky-By
August 17:
The Centre’s move to induct two CEOs from the private sector into two major public sector banks (PSBs) as part of its plan to revive government banks is a bold step with all its attendant risks. PS Jayakumar and Rakesh Sharma are being appointed to head two major public sector banks — Bank of Baroda and Canara Bank, respectively.
If the government had chosen to induct them into one of the smaller banks, it might have hardly created any ripples. The fact that they are being asked to head two of the largest banks in the government sector (with international operations and a number of subsidiaries) has raised some eyebrows.
Even those public sector bankers (General Managers and Executive Directors) who ascend to the top job in another bank find that the transition is not very easy.
They tell you that it takes anywhere from six months to a year to get a grip on what is going on in the new bank. Some CEOs have failed because they couldn’t get along in the new bank — although the upside, if you can call it that, is that the tenures hitherto have been mercifully short.
Immediate challenges
What are the immediate challenges that these new CEOs will face? First is the poor state of the economy, which is yet to show a clear sign of revival and, consequently, contributes to tepid growth in new loans and large accumulation of bad loans.
What are the immediate challenges that these new CEOs will face? First is the poor state of the economy, which is yet to show a clear sign of revival and, consequently, contributes to tepid growth in new loans and large accumulation of bad loans.
Second, they need to find the right people in middle management and build a future-ready cadre.
Third, they need to raise capital to fulfil regulatory requirements.
Fourth, they need to restore morale and, of course, breathe new life into these institutions that have remained headless for quite some time. This would be a handful for anyone.
Procedural hassles
What makes it more challenging, a retired top banker said, is the requirement of procedures taking precedence over results, which is ordained by the government on all PSBs. This cannot easily be understood and followed by an outsider, he said.
What makes it more challenging, a retired top banker said, is the requirement of procedures taking precedence over results, which is ordained by the government on all PSBs. This cannot easily be understood and followed by an outsider, he said.
For example, even for procurement of small things, a PSB has to go through a tendering process and give it to the lowest bidder. Should there be a deviation in procedure, even if it ultimately proves beneficial, the bank’s senior management will have to face vigilance queries.
Moreover, for all government schemes, PSBs are required to deliver results, Jan Dhan scheme being only the latest example. The challenges that await these two can well be imagined — and the learning curve will probably be steep.
There are some repercussions for those in the middle management at these banks because of the induction of outside talent at the top. For some, it may seem as though their career progression plans are prematurely closed.
Their morale, already a bit battered, may now suffer a bit more, at what is an implied rebuke of their operating style and competence for the top job.
This could well occasion some churn at those levels and may heighten the problem of the missing middle management that many public sector banks already grapple with.
The possible negative fallout of this experiment to get private sector CEOs may have been realised by the government and that is why it probably decided to do this as a limited experiment.
Financial Services Secretary Hasmukh Adhia said in an interview to this paper that the next round of appointments will be only from the current pool of Executive Directors in public sector banks.
Deserves fair trial
Despite the many downsides to this experiment, it marks a leap of faith by the government and deserves a fair trial.
Despite the many downsides to this experiment, it marks a leap of faith by the government and deserves a fair trial.
The fact that the two gentlemen in question have refused market-related compensation and has decided to take it up purely as a professional challenge, fetches them some brownie points and will add some heft when they try to boost staff morale.
Certainly, the bank staff will have one less issue to gossip about, and the two have started on the right note — emphasising their commitment rather than their price.
Problem Of Stressed Assets Is Bigger -By Danendra Jain
Now the million dollar question is whether banks can sustain such large and continuous loss of money in bad debts and in write offs. There is limit for everything. Year after year banks are sacrificing huge money in writing off loans and in compromise settlement with defaulting borrowers. Load of bad debts is rising every quarters. Banks have learnt how to hide bad debts by using various tools of rephrase, restructure or evergreening of loans. Bank officials who do not hide bad loans are taken to task and those who are master in manipulations are awarded. Not only bad loans but rising fraud cases in banks are likely to pose a greater challenge to survival of banks.
Not only this , even government does not want banks to disclose all bad debts in one go because it will expose politicians who misused and mismanaged banks .They do not want to close the source which help them in gaining political and financial powers. When banks face capital crisis , Government infuse capital to save them from exposure. After all , it is not the private property of politicians which is lost but it is public money which is ultimately lost and it is public who have to bear the burden of taxes. But the question is how loan this huge loss of public money will continue and how long Government will help banks.
It is important to point out here that the same government stopped subsidy on fuel like petrol, diesel or LPG in phased manner only because it could not sustain the increasing load on subsidy on public exchequer. Government justify the stopping or curtailing of fuel or fertiliser subsidy saying that it hampers growth and it leads to pilferage of subsidy . They says that the amount of such subsidy is largely taken away by middlemen, babus, officers and upper class .
Click Below given link to read more
http://importantbankingnews2.blogspot.com/2015/08/problem-of-stressed-assets-is-bigger.html
Problem Of Stressed Assets Is Bigger -By Danendra Jain
Now the million dollar question is whether banks can sustain such large and continuous loss of money in bad debts and in write offs. There is limit for everything. Year after year banks are sacrificing huge money in writing off loans and in compromise settlement with defaulting borrowers. Load of bad debts is rising every quarters. Banks have learnt how to hide bad debts by using various tools of rephrase, restructure or evergreening of loans. Bank officials who do not hide bad loans are taken to task and those who are master in manipulations are awarded. Not only bad loans but rising fraud cases in banks are likely to pose a greater challenge to survival of banks.
Not only this , even government does not want banks to disclose all bad debts in one go because it will expose politicians who misused and mismanaged banks .They do not want to close the source which help them in gaining political and financial powers. When banks face capital crisis , Government infuse capital to save them from exposure. After all , it is not the private property of politicians which is lost but it is public money which is ultimately lost and it is public who have to bear the burden of taxes. But the question is how loan this huge loss of public money will continue and how long Government will help banks.
It is important to point out here that the same government stopped subsidy on fuel like petrol, diesel or LPG in phased manner only because it could not sustain the increasing load on subsidy on public exchequer. Government justify the stopping or curtailing of fuel or fertiliser subsidy saying that it hampers growth and it leads to pilferage of subsidy . They says that the amount of such subsidy is largely taken away by middlemen, babus, officers and upper class .
Click Below given link to read more
http://importantbankingnews2.blogspot.com/2015/08/problem-of-stressed-assets-is-bigger.html
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