Banking Definition From India's Perspective

This article will definitely help all the bankers worked in any banks as well as the students preparing to enter the banking industry space. 

Banking is very simple but many claim it to be very difficult. But Banking is in simple terms- DEPOSIT-ADVANCE-RECOVERY. But in the name of universal banking banks are trying to become omnichannel through which banks try to cater all types of facilities to customers so that customers hook to them. It's the simple strategy used by all leading private sector banks as well as public sector banks in India. 

CUSTOMER is the main component of the banking ecosystem. This is not clearly understood by the bankers working in many PSBs. If we look very very carefully, we will discover that many are not having any interest to do the business. Before entering the banking sector they might have rosy pictures in their mind for which they feel dissatisfied when they join banks. Here the main skill which every bankers need to have that is communication skill and interpersonal skill. But this skill is being underrated. They exclaim that a banker need to have thorough understanding of credit analysis skill. This skill will be acquired if we will be given exposure to 5 to 6 good proposals. But before that we need customers. Here to communicate with customers we need to have one weapon that is COMMUNICATION SKILL. If we survey among bankers you will find many are not satisfied with the banking job. Why?? It's not because pay is not good. But here you are to deal with customers. Many times it is observed that the students which are good at study are not good at banking. Why?? Because here you need to have self motivation to achieve by having some skills which are not studied in Indian schools. This creates pressure psyche. Skills are not being a buzz word in the training center as well. They just try to provide some training how to use CBS software and for credit how to fill documents, limitation law etc. But the bankers are not given any training how to get right customers, how to understand the requirements of customers, how to work in a team, how to achieve the target as a team. Many do not feel any importance to go through CIRCULARs thoroughly citing funny reasons. Due to not having knowledge of various products, banks instructions to operate bankers start feeling pressure, demotivated. These are very few reasons cited here. You know, many reasons can be enumerated. But important skills we are talking about is Communication Skill and Interpersonal Skill. That's why in IBPS we are given Reasoning as a part in examination. 

Banking for common bankers is nothing but DEPOSIT-ADVANCE-RECOVERY. So there are two parts, Deposit And Advance. But in the competitive edge we are exposed to fierce competition which eventually make bankers to believe that they need to have all kinds of financial knowledge. It's true to some extent but it is not complete picture. Banks earn from interest income and non interest income. To earn interest income, bankers to give loan to good people who are having repaying capacity, character and integrity. This is called due diligence when on boarding customers. But as NPA piles up in PSBs, it is commonly thought PSB bankers are not having adequate risk assessment capacity and monitoring of the loan portfolio. So the interest income is hampered in many PSBs. Also PSBs are not having enough non interest income which dent their operating profit as well. So everybody try to provide many solutions at one go. But the answer lies in the SKILL and Motivation to achieve. So it becomes imperative for the PSBs to impart proper training which will infuse the right kind of motivation to perform. The professionalism is also not reflected in their functioning.

So as a banker, what you need to have? You need to have enthusiasm to acquire the spirit of professionalism and wear the hat of the leader. This ultimately translates into performance and profit of the banks. Then only the bakers will have bargaining power to raise their salary which nobody can imagine of.

Problem lies in manifold in many PSBs, But for last one year you are getting extraordinary results of Bank of Maharastra, UCO bank. Why they are having unbelievable result. It's because of their leadership and the employees working tirelessly to turn around. If you think all are performing in these banks, it's wrong to believe so. Many are also dormant  or you can say in nascent state. But if the 60% bankers of PSBs  perform to their fullest potential, no body can stop them posting a huge chunk of profit Q-O-Q. Now you can also cite the example of SBI. Many will agree that their skills in analysis of credit who approach bank for loan are exponentially grow for which they are now in well position to post handsome profit Q-O-Q. So what we discuss in above is the SKILL and Leadership. So Leadership does not only lie in the MD and CEO of the bank, but also lies in the branch managers whom the staffs are expecting to be their role model. So great leadership will not only impart cushion to the bank but also comfort to the staffs as a whole.

Branches means Rural, Semi Urban and Urban. Here the cache lies, many like to believe only urban branches are profit centers but it's absolutely false notion. Urban is overcrowded with many branches for which it becomes very difficult to generate business. That does not mean business can not be done in urban branches. But problem lies with the PSBs operating here do not able to understand the customer segments of the Urban demography. The customers here have quite great bargaining power, so bankers are succumb to their requirements, if not they will leave you at one go putting a dent on the operation of the bank. So to deal with such customers you need to have good listening skill. These customers want somebody should listen to them. So if you listen them very very carefully and reply accordingly you will have the business with them. It's one thing very important to deal with urban customer segments as they tend to think they know banking more than any bankers.

But in rural branches, you will have many opportunities, but here bankers need to have proper strategy to capture the market share. Before that bankers need to wear the hat of Communication Skill and Listening Skill. Generally it is regarded rural branches are not profitable, but if you look very very closely rural branches are going to become the profit centers for the banks in coming days. Generally rural people and their demographic composition rapidly change. So their aspiration to have vehicle, home are now more evident, for which many pvt banks also try to tap the opportunity. Here one will have empathy and good communication skill will be able to tap the market.

So for a banker deposit, advance, recovery are 3 pillars about which bankers need to have proper understanding. Without low cost deposit you are not able to give advance which will be profitable. Also giving loans easy but recovery will reflect your assessment and translate into strong profit. So for a banker understanding the banking definition and having the proper skill sets will make him unbeatable in banking domain and will be in demand forever.

So Bankers are to have the requisite skills for the banking carrier, otherwise he will always have pale and dull face. Many bankers are getting irritated on the customers. Why? Because they lack the listening skill. So 2 skills are very important. One Communication Skill and The second one is Listening Skill. Both skills not only give you advantage to garner good business but also give you advantage over other bankers to excel in you banking carrier.