| Jalan: With an open mind
Mumbai, April 5: For a powerful banking system, the country needs a competitive and open financial market along with a strong regulatory system and better human resource practices, Reserve Bank governor Bimal Jalan said today.
He was speaking at the concluding session of the Banking Summit 2003 — ‘Does Ownership Matter' Unshackling banks for competition’.
Jalan’s comments followed observations by senior bankers that more flexibility was needed in the HR policy of public sector banks.
The bankers, led by the likes of State Bank chairman A. K. Purwar and Central Bank chairman Dalbir Singh, said that nationalised banks had adequate flexibility in operational areas vis-a-vis human resources but more flexibility was needed in other areas.
The bankers want salary structures that conform to market trends, accelerated promotions to deserving candidates and better placement in the organisation.
K. V. Kamath, CEO & managing director of ICICI Bank, said manpower played a significant role in the present times where “the way in which banking business is conducted has undergone a rapid change”.
“The key issue is access to human capital. Does my brand attract human capital and can the human capital be rewarded adequately' These are some of the key questions,” he said.
Responding to the questions raised by the bankers, Jalan said there were no clear-cut answers to the issue of ownership. He, however, agreed that human resource is a critical aspect and some rules should be changed.
Jalan added, “A competitive and open financial market with multiple players and products, a strong regulatory system that matches international standards in terms of capital adequacy ratio and provisioning requirements are also significant.”
“This will lead to the growth of the country and help the customer,” he said.
On corporate governance, Jalan said that there is no particular model of corporate governance that works. Factors like accountability, system of checks and balances only work. “The CEO is not the master. Accountability and disclosure are the other ingredients of corporate governance,” he added.