Leadership Development in Indian Banking Sector: Opportunities & Challenges
Posted: 8 Jan 2016
Date Written: January 7, 2016
Abstract
Indian financial sector is dominated by banks. Interestingly, commercial banks account for over 60% of the total assets of financial system comprising of banks, insurance companies, non-banking financial companies, cooperative banks, mutual funds and other financial entities (Reserve Bank of India, 2014). Hence productivity and efficiency of banks are closely interlinked with overall growth of Indian economy. However, the banks are currently reeling under phenomenal talent crunch across levels (McKinsey, 2013). Talent deficit in public sector banks is characterized by high average age leading to high retirements at senior management levels while private banks are typically affected by high attrition rates especially at junior management levels (McKinsey, 2013). In public sector banks, more than three-fourths of the current population for levels Assistant General Managers and above is expected to retire by 2020 (McKinsey, 2013). Hence, it is imperative that both private and public sector banks make significant investments in terms of employee time and training cost to nurture a viable leadership pipeline in order to remain competitive. This paper explores opportunities and challenges in leadership development in Indian banking sector as strategic option to overcome talent shortage. This becomes all the more important as contemporary banks have to struggle hard to meet clients’ expectations of superb and flawless banking services, aspirations of the investors for higher returns and stringent norms of the regulatory authorities. Based on secondary literature, this paper provides a holistic leadership development paradigm for Indian banks.
Keywords: Leadership Development, Banking Sector, India
JEL Classification: M00, M10
Suggested Citation: Suggested Citation