 "Banks-to-be step up scrutiny before hiring key personnel")
The small finance and payments banks aspirants that will be entering the banking arena this year have decided to go for a deeper scrutiny before hiring key personnel. This practice that had been so far typically limited to foreign and select private banks so far is now being adopted by smaller niche banks as well.
"Now that we are beginning operations, it is very important for us to ensure that the top management that we have can build organisations and, therefore, having these independent and detailed verification checks have become important," said a top executive of a payments bank.
Experts believe that despite the fact that most of the firms that have been granted the small finance bank licence are small micro-finance firms, the latter are still warming up to the international practices of deeper background checks - a positive step. As a result, apart from just employing the usual methods of a cursory check of background, educational qualification and record at the previous employer, the new players are going in for more detailed checks, including looking at ethical track records, team building exercises undertaken, judicial checks, and leadership abilities.
However, till now, these practices are mainly limited to the top management and board levels.
But experts say that banks are warming up to the idea of taking it to the middle level as well, especially in certain operations which involve giving credit.
Last year, the Reserve Bank of India (RBI) had granted small-finance-bank licences to 10 of the 72 applicants. Small finance banks will be similar to existing commercial lenders and will undertake basic banking such as accepting deposits and lending to the un-served and under-served sections.
BACKGROUND CHECK This practice that had been limited to foreign and select private banks, is now being adopted by smaller niche banks
Experts believe that despite the fact that most of the firms with small finance bank licences are small micro-finance firms, the latter are still warming up to global practices of deeper background checks - a positive
"Now that we are beginning operations, it is very important for us to ensure that the top management that we have can build organisations and, therefore, having these independent and detailed verification checks have become important," said a top executive of a payments bank.
Experts believe that despite the fact that most of the firms that have been granted the small finance bank licence are small micro-finance firms, the latter are still warming up to the international practices of deeper background checks - a positive step. As a result, apart from just employing the usual methods of a cursory check of background, educational qualification and record at the previous employer, the new players are going in for more detailed checks, including looking at ethical track records, team building exercises undertaken, judicial checks, and leadership abilities.
Also Read
"It is important, especially in organisations that are fast growing and the whole success of these small banks is going to be on their ability to build scale. You are a small company and you are hiring the 10 people who five years from now will be running the business, which will be 10 times the current size. So, the corporate governance standards, technology employed, and the practices used by them will set the tone. And as a result, we are seeing huge amount of response from such new organisations that are willing to invest in it," said Reshmi Khurana, managing director, Kroll India.
However, till now, these practices are mainly limited to the top management and board levels.
But experts say that banks are warming up to the idea of taking it to the middle level as well, especially in certain operations which involve giving credit.
Last year, the Reserve Bank of India (RBI) had granted small-finance-bank licences to 10 of the 72 applicants. Small finance banks will be similar to existing commercial lenders and will undertake basic banking such as accepting deposits and lending to the un-served and under-served sections.
BACKGROUND CHECK
- The small finance and payments banks aspirants that will be entering the banking arena this year have decided to go for a deeper scrutiny before hiring key personnel