RBI in discussion to implement the Report of the Committee on Capacity Building in Banks and non-Banks

About the committee:

• This Committee was set up by RBI as recommended by the Financial Sector Legislative Reforms Commission (FSLRC), a body set up in 2011 to reform the institutional and legal structures of the financial sector
• Chairman: G. Gopalakrishna, Executive Director(now retired), Reserve Bank of India. Total 10 members in the committee.
• Aim: To ensure availability of skill sets at all levels for effective delivery on required roles and responsibilities
• The committee gave many recommendations:
  • It envisaged capacity building in terms of HR management practices, underlining the strategic importance of HR in affecting the top and bottom lines of balance sheets
  • On training methodologies and interventions, including requiring employees to pass certification programmes prior to being promoted
  • The committee has recommended a 360-degree feedback for a transparent and comprehensive performance assessment exercise, one that ensures adequate performance differentiation between employees
  • It also suggested that banks must avoid transfer for the sake of norms and make them need based as per leadership requirement.
  • Create a position of Chief Learning Officer in banks for leadership development, knowledge dissemination and sharing.
  • The report has suggested a common Banking Aptitude Test at a national level for entry level employees
  • Centre for Advanced Financial Research and Learning (CAFRAL) can administer the mentoring programme for CMD/CEOs of banks

Capacity building:

• The concept of capacity building went beyond just training and included human resource development, organisational development, institutional and legal framework development.

Progress:

• June 23^rd: The central bank is in discussions with the Ministry of Finance, Government of India and the Indian Banks’ Association to make the recommendations of the Committee operational