How Cobrapost reveals bankers' lack of training

When the cobra stings, the remedy has to be instant.

That's something public sector banks and their master (the finance ministry) know quite well, which perhaps explains the swift action on their part.

Less than 24 hours after Cobrapost alleged that 23 major Indian banks and financial institutions are running a nationwide 'money-laundering racket', the chairmen of these banks informed the ministry that they have suspended 15 employees, while 10 more have been divested of their work and six asked to go on leave.

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The transcripts of conversations posted on the online magazine's website indeed show how some of the employees are all too eager to gain business; aiding customers to invest unaccounted money in insurance policies; advising them on ways to avoid coming under the income-tax scanner, including quoting the wrong permanent account numbers and splitting the money involved in a number of small transactions below the reporting threshold.

In that context, such actions do justify the punishment.

While some of the employees proved themselves veterans of the crooked game, a few tapes exposed one thing that nobody is talking about -- the lack of knowledge of even the basics of banking, clearly revealing how ill-trained some of these bankers are for the positions they hold.

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For example, one of the bankers keeps advising the 'customer' about putting the cash in different names while, at the same time, insisting on submitting the PAN card and other documents.

"Open a savings account and deposit your money in it.

"If you have a PAN, there is no problem; you can deposit as much as you want."

On being questioned whether the submission of the PAN card and other documents would expose him, the banker, quite helpfully, says 'nothing is disclosed from here'.

She also advises doing some transactions in cheque, and talks incoherently about opening recurring deposits, fixed deposits, etc (of course, after the submission of the PAN card).

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The sheer lack of knowledge prompts even Cobrapost to comment that the banker 'seems inexperienced in handling black money, though she doesn't give up'.

Yet another banker brags about how he is an expert in converting black money into white, and how the cash will be 100 per cent safe with his bank.

He then says all the hard cash can be put in savings accounts, but only after the submission of documents, including address proof, passport, photographs and finally, the PAN card.

It's obvious that the bravado and loose talk are prompted by only one thing: the banker is extra eager to get new business, but lacks the knowledge of his job.

He is just going through the motions while turning a blind eye to the claim of the 'customer' that his funds are unaccounted for.

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One wonders whether bankers like him have ever heard about the requirement of doing proper customer due diligence.

It's also obvious that most banks do not have a clear segregation of duties as marketing personnel.

Bank employees were directly receiving incentives from third parties such as insurance companies, mutual funds and other product providers.

Most public sector bankers talk about how outdated the training system is.

For example, the training department in most banks is content with asking branch managers to send employees for drab classroom sessions once a year.

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The perception about such training is obvious from the fact that most branch managers send the names of employees they can do without.

And those who attend the training session treat it as a convenient getaway from the daily drudgery of work.

The Khandelwal committee had given some sensible suggestions on this aspect.

It's revealing that only a handful public sector banks have constituted training advisory committees to provide strategic direction to training, and just one bank has in place management audit to review the efficacy of its training system.

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Even though almost all banks have set up large training infrastructure, the system is still not adequate to meet the current-day requirements.

Although workmen staff constitute 63 per cent of the total workforce, only 30 per cent benefit from the training system, which in any case is not adequately directed towards their re-skilling needs.

And the rot begins from the beginning itself.

For example, induction training for newly recruited officers in most banks is restricted to two to three weeks only, while the need is to have at least two years of mandatory training.

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During the training period, they should be mentored by recently retired executives, say, in the last five years, and should not be posted in regular jobs.

In addition, almost all banks are facing acute skill shortages in areas such as corporate credit, risk management, treasury, information technology, marketing and so on.

The committee suggested at least 75 per cent of functional training in future can be through e-learning and other alternative delivery channels, for which, inter-bank collaboration could also be explored.

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"Banks may consider adopting the cardinal principle of 'back to school' under which everyone in the bank right from the CEO to the clerk undertakes an unlearning and relearning journey on a continuing basis," the committee suggested.

While the crooks must be punished, the Cobrapost revelations show at least some of the bank employees 'exposed' in the tapes could have given a far better account of themselves if only bank managements took the Khandelwal committee report seriously.