Thursday, September 25, 2014

Bank Officer Should Act as Per Their Conscience.

I am submitting below an article published in the newspaper The Economic Times Today, 6th November 2012.. This true Story of Mr. Aditya Puri has many lessons to learn not only for Manager of Public Sector Banks but for  all individuals and Managers of all organisations and all political parties too.

Specially Manager of public sector banks should introspect and try to discover what is really best in the interest of the bank they serve. Why do they care only their bosses and not the bank which pay them salary and which takes care of all their comforts?

Why private banks like HDFC or ICICI or Axis Bank can achieve such grand success in only two decades of their existence which hundred year old banks could not do?

Why bad assets have accumulated in such large volumes on PS banks , not in private banks? Why do they hide bad debts? Bu hiding bad debts they simply postpone treatment to sickness and ultimately cause total loss. They will retire peacefully or their boss may retire peacefully even by doing wrongs and causing hug loss to banks , but new generation guys will curse all who damaged the fundamentals of banks for self interest.

They should at least stop making lame excuses of economic slowdown or high rate regime or natural calamities for all their faults, their lack of vision , their misinterpretation of economic situation of the country  their weakness in assessing the demand of Indian loan seekers and finally their lack of understanding the demand, nature ,capacity and character of loan seekers.

I may say in brief that majority of Manager of state run banks became victim of not only their own greed of money and power and ambitions to become big boss but also that of trader union leaders and politicians who lure them with good posting and quick promotions . During Reformation era , they became not only victim of their bosses, their union leaders and politicians but also puppet in the hands of big corporate houses in nexus with their mentor politicians and their  trade union leaders( who are considered as protector of interest of working class have become booster of corruption perpetuated by corrupt bank officials ) . All these have resulted in sickness of banks or rise in bad debts which is putting hurdles in wage hike now.

It is Trade Union Leaders in these banks who helped bank management in converting Human Resource development Department into Human resource destruction Department.It is they who for their vested interest joined hands with top officials of bank and created wrong culture of flattery and bribery which during the course of time has resulted in such critical illness of these banks.  I say so because as soon as union leaders join hands with bank management , IR problem is reduced and avoided to a great extent and Ministry of Finance do not hesitate in concluding that all is well in banks.

Ultimately under such circumstances , sufferers always remained and sufferer always  are non other than staff of banks, customers of banks and investor of banks. It is ultimately taxpayers money which is lost  when bad debts rises, or when bad debts are written off or sold at discount to ARC .

Government and politicians never own the responsibility  of ailing status of public sector banks, they always point out their accusing fingers towards others as per their comfort and as per need of the hour.Politicians are very much clever and they know the art of How to befool innocent and illiterate  Indian mass and Indian media people by placing concocted data and spreading misinformation.They have power in their hands, they can award non performer by giving him promotion and they can punish performers by posting them at critical places.

But it is undoubtedly true that officers in bank who are holding key posts in various banks have themselves created and concealed bad assets for last two decades , sometimes in the name of positivity, sometimes to please ministers and sometimes in the name of achievement of credit targets or in the name of social welfare schemes and sometimes in the name of customers and investors.

It is undeniably true that whenever a fraud is exposed or whenever misdeeds of corrupt officials is exposed, it is colleagues in banks who come forward to provide safe exit and exoneration from charges. Evil does leave their bank or leave the branch but his successor and tax payers have to pay the cost for none of their fault. Banks have accumulated bad debts amounting to abut 25% of their total loans , not in one or two years but in about ten years when hiding bad debts was the order of higher bosses.

In the name of HR policies they have always misused sound policies for their vested interest and created bad culture in state run banks which has resulted in negativity among serious performers and which has contributed in continuous erosion in bank's profitability .Officers who preach to be positive and indulged in doing only negative and harmful acts. Never be guided by officers who preach sermons and who speak loudly before large audience to safeguard banks. It is your own conscience which may provide safety to banks , not those who stab the bank fro the back.

ET’s company of the year 2012: We followed pretty much a philosophy like Apple, says HDFC Bank chief Aditya Puri

MUMBAI: (Published in Economic Times today  6th November 2012)
The 61-year-old chief executive of HDFC Bank who has managed the impossible in 18 years does not draw on management gurus Philip Kotler orMichael Porter to explain his success. He just digs into the age-old Hindu wisdom of Karma Yoga.

Aditya Puri guided HDFC Bank to become the most sought-after bank for investors across the world. Though he cut his teeth in a Western financial school, Puri has done everything to prevent his bank from becoming one of those that mindlessly chased growth.

The hallmark of HDFC Bank is that it has achieved probably what no other listed company has achieved in the country or anywhere else in the world - delivering a 30% growth for 52 quarters, stripping off the impact of the acquisition of Centurion Bank of Punjab in 2008.

So, the jury of the ET Awards for Corporate Excellence adjudged HDFC Bank the Company of the Year, 2012 - the year it surpassed the 206-year-old State Bank of India in market value.

What is the secret formula and the guiding principle that led to its consistent performance when the entire world was riding the rough seas?

"Hindu dharm nahin malum? Tum apna karam karo. Fal ki icha mat karo," says Puri, sipping hot water on the 6th floor board-room of the bank in mid-town Mumbai. (Do your duty and don't look at the fruits of labour).

The dharma is the foundation and the management principle is not complicated either.

"Don't try to do too many things. We followed pretty much a philosophy like Apple. It is more important to know when to say no. Don't try and do everything. We knew what we were doing."

HDFC Bank today has a market value of Rs 1.49 lakh crore, assets of more than Rs 3 lakh crore. It has 2,620 branches and 10,316 automated teller machines in 1,454 Indian towns and cities. It is walking into many more towns.

Almost every lender is talking about exploiting the growth in tier-2 and tier-3 cities. Puri talks even about tier-6! HDFC Bank offers almost every product that a billion-dollar corporate wants and has something to provide a daily-wage earner - gold loan. But, there is nothing exotic in any of the things that HDFC Bank does.

Is the extraordinary success of the last two decades possible given the shaky economy?

"The demand for financial services exceeds supply and it still holds. If you had the right brand name which stood for the right values, the right product and the right customer focus, the right people, the right technology... sky is the limit in the next to five-10 years," says Puri.

The atmosphere is not as gloomy as is being projected. Corruption is prevalent, but it is not all-pervasive. There is an opportunity to grow and profit without indulging in any corrupt practices. Indeed, he destroys the myth that people in government need to be bribed for business.

"I can tell you, it is a fallacy that dealing with the government necessarily requires you to have bad ethics," says Puri. "I can name 20 governments that we deal with where the reason we got business is that we are clean. I think there are a lot of fallacies here."

Unlike most CEOs who spend nearly two-thirds of their day in office, Puri returns home at 5.30 pm. He would keep doing it, because the institution is on auto-pilot and the systems and people are in place.

"Instinctively, everybody knows corporate governance. The problem is if you don't institutionalise it. Water and money... you can't control

He is in control.

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