High average age of staff big challenge for state banks: PNB

"The HR (human resources) poses the biggest challenge to the public sector banks in India. The virtual freeze in recruitment for almost a decade in PSUs has resulted in high average age of staff that imposes a significant challenge in re skilling of staff as changes in technology and customer expectations require new skills and behaviours," PNB CMD K R Kamath said in the bank's latest monthly review.

He said the changing profile of banks with customers taking centrestage requires specialists staff who are well versed in nuances of different products and handling clients.
"The people have to be offered career tracks linked to specialised business offerings like corporate banking or forex etc or even based on functional departments like IT, Finance or HR,"  Kamath added.

He said the banks would need to focus on recruitment and career planning, performance-linked incentives and succession planning for attracting and retaining talents.
"Banks may be required to adopt flatter organisational structure and a customer-centric business model to enable them to understand, anticipate-proactively or at least quickly react to customer needs," Kamath said.

According to him, the revenue model will get altered for banks too.
Fee-based non interest income will get more and more significant due to the shift from transaction-based services to value-added services, PNB said.
Kamath said that the opportunities for the banking sector from retail segment will rise in the future.

"Higher disposable incomes, better jobs and earning opportunities for the young, exposure to globalised environment, changing demographies, lifestyles and affluence levels led to retail revolution in recent past," he said