MUMBAI, July 15: International consultant, Price Waterhouse, has said that the senior management of the Indian capital market institutions has failed to understand the benefits of developing an internal training programme.

"The institutions are glad to receive the training offered by the project, but show relatively little initiative in identifying training needs at each department and staff level and in developing a training programme to address these needs," states a report which assesses the training activities conducted under the aegis of the Financial Institutions Reform and Expansion (Fire) project sponsored by USAID and the Indian government. The assessment report was commissioned to determine whether the Fire project is meeting its training goals.

The report, which was recently submitted to the Securities & Exchange Board of India (Sebi), states: "In this context it is likely that once the project ends so will interest and capacity to deliver quality programmes in key areas such as surveillance, compliance and enforcement."

The report states that the benefits of internal training are poorly understood by the senior management and their institutions do not understand the need to invest in this activity.

"They also do not understand how continuing education can be linked to broader career development and workforce management tools. Getting institutions to realise the need to take charge of the training function will be critical if project training resources are to be leveraged fully and if training is to benefit the organisations and not just the individuals," the report adds.

The report has called upon industry associations such as the Association of Merchant Bankers of India (Ambi) and the Association of Mutual Funds of India (Amfi) as well as the stock exchanges to play an important role in the development and dissemination of materials to professionalise the industry and educate investors.

Price Waterhouse has suggested measures which need to be taken to ensure that constant training can continue to be imparted across the Indian capital markets.

The short term recommendations include strengthening the commitment and capacity of client institutions to address internal training needs. This includes building the awareness of the need for and the benefits of internal training.

It also includes strengthening the capacity of self regulating, professional and trade organisations to professionalise the industry and educate investors. "The project should encourage institutions such as Amfi and Ambi to create training committees and appoint the staff to oversee internal and external training activities," the report states. The long term initiatives include providing technical assistance and training to select academic institutions like the Indian Institute of Managements (IIMs) in capital markets and financial analysis.

"Capital markets diploma courses and even IIM's own offerings in these areas are somehat outdated and do not go much beyond high level accounting. There is also a need to impart training and technical assistance to law schools in the design and development of programmes on enforcement and other areas relevant to the regulator," states the assessment report.

Lastly, Price Waterhouse has stressed the need for research and training in corporate governance which it feels is a critical ingredient in terms of creating transparent markets and generating investor confidence.

"In India it is also a topic that is greatly misunderstood," states the report.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.