Public sector banks lagging in risk appraisal skills

BL MANGALORE, NOV. 10: 2013 

Most banks have identified training gaps in the areas of credit/risk management, agriculture programmes, and foreign exchange, according to Reserve Bank of India Executive Director G. Gopalakrishna.

These areas require an equal measure of knowledge of rules, practices and specialised skills for appraisals, on the one hand, and an awareness of markets, on the other, he said while inaugurating the Nitte Institute of Banking and Finance at Nitte University in Mangalore.

Banks, he said, require training by external experts and institutions in these areas.

Stating that the training needs cannot be uniform across the banking industry, as each bank has a unique structural make-up of its own with a different set of aspirations, he said: “What applies to a public sector bank may not be applicable for a different skill set present, say, in foreign banks and new generation private sector banks.” Public sector banks have shortage of skills in credit appraisal and risk management, whereas new generation private sector banks and foreign banks have better skills in these areas, he said.

The training intervention in banks will have to be geared towards orienting, facilitating and encouraging more employees to take up positions in such areas to manage the competitive rush, Gopalakrishna said.

Stressing the need for the institution to follow a regimen of analysing training needs, he said this would help ascertain specific training requirements and address them specifically.

TRAINING PROGRAMMES

On an average, 60-65 per cent of bank employees are covered every year under some training programme or the other. While some banks have been able to train 85-90 per cent of their workforce, a few have been able to train not more than 40 per cent of their staff in a given year, he said.

Training is also required for senior employees, including board-level executives of the bank, in terms of accountability, responsiveness, and competence. These factors call for appropriate training interventions to keep them up-to-date.

It will be necessary to train independent directors on the boards on aspects such as their powers and responsibility towards the stakeholders and expectations from them that transform with changing times. This will help them perform their role well and without any interference, he said.