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IBA is an ad hoc, insular, toothless body and is degenerating: Bankers

Our Banking Bureau

MUMBAI, July 17: International management consultant Arthur Andersen has recommended a total revamp of the structure, strategy and systems of the Indian Banks' Association (IBA). Arthur Andersen has also called for a relook at the banking body's human resources management.

The IBA management committee is expected to give the green signal to the recast plan in the forthcoming meeting on August 4. "IBA can play a special role in restructuring Indian banking, increasing autonomy in the industry may require IBA to discipline through moral suasion and IBA can also be the visionary integrating Indian banking into global markets," Arthur Andersen said.

According to the consultant:

  • Member banks expect IBA to function as a credible voice of the banking industry and act as a powerful lobbyist;
  • The Reserve Bank expects it to develop progressive ideas and present viable suggestions and also support it in the formulation and implementation of regulations;
  • The finance ministry wants IBA toact as a storehouse for information on banking and reduce its role at the operational level;
  • Bank employees expect the IBA to provide them direction and a conducive work environment; and
  • Bank unions expect it to act as an independent credible body heard by the government.

    Arthur Andersen has observed that the roles of IBA officials are poorly communicated and there is an absence of strategy in the organisation. The IBA is not dynamic enough and there is no accountability, it said. Commenting on the structure of the organisation, Arthur Andersen has said that "policy making" and "delivery" are not clearly defined and there is inefficient use of the management committees. It has also observed that the committees are largely ineffective. Arthur Andersen has said that IBA needs a dynamic leadership, an empowered secretariat and effective standing committees to improve its structure.

    At present, almost all the management committee meetings focus on unimportant issues and very few issues that MUMBAI, July 17: International management consultant Arthur Andersen has recommended a total revamp of the structure, strategy and systems of the Indian Banks' Association (IBA). Arthur Andersen has also called for a relook at the banking body's human resources management.

    The IBA management committee is expected to give the green signal to the recast plan in the forthcoming meeting on August 4. "IBA can play a special role in restructuring Indian banking, increasing autonomy in the industry may require IBA to discipline through moral suasion and IBA can also be the visionary integrating Indian banking into global markets," Arthur Andersen said.

    According to the consultant:

  • Member banks expect IBA to function as a credible voice of the banking industry and act as a powerful lobbyist;
  • The Reserve Bank expects it to develop progressive ideas and present viable suggestions and also support it in the formulation and implementation of regulations;
  • The finance ministry wants IBA toact as a storehouse for information on banking and reduce its role at the operational level;
  • Bank employees expect the IBA to provide them direction and a conducive work environment; and
  • Bank unions expect it to act as an independent credible body heard by the government.

    Arthur Andersen has observed that the roles of IBA officials are poorly communicated and there is an absence of strategy in the organisation. The IBA is not dynamic enough and there is no accountability, it said. Commenting on the structure of the organisation, Arthur Andersen has said that "policy making" and "delivery" are not clearly defined and there is inefficient use of the management committees. It has also observed that the committees are largely ineffective. Arthur Andersen has said that IBA needs a dynamic leadership, an empowered secretariat and effective standing committees to improve its structure.

    At present, almost all the management committee meetings focus on unimportant issues and very few issues thatare discussed get converted into decisions. The attendance on most of the committees currently is less than 50 per cent with a very low level of commitment of member participants. Arthur Andersen has observed that the output of the standing committees is marginal and of a low quality. The general perception of stakeholders in IBA is that all powers are vested in the chairman and the secretary is just a figure-head. Most bankers feel that there is an absence of professionals on committees and that IBA is a place for compassionate posting to enable people to avoid transfers.

    Bankers have also said that they have "no faith in IBA's abilities to provide solutions and interacting with IBA is very distressing and disturbing. IBA is an ad hoc, insular and toothless body which is degenerating due to outdated roles." Of the 119 employees at IBA, 24 per cent are in the sub-staff category while professionals constitute just one per cent of the total workforce. Nearly 33 per cent of IBA employees have received notraining at all. Arthur Andersen has noted that IBA has very low skill levels with inadequate and often inappropriate training. The bankers' body has an ineffective performance appraisal system with discretionary staff policies which have led to low employee morale.

    Arthur Andersen has said that the work culture at IBA, which is predominantly "public sector" in nature, has led to ineffective communication within the organisation and initiative and decision-making is not encouraged.

    Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.

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