'Stiff competition ahead for Indian Banks'

Indian banks have about five years to shape up to face the challenges of unfettered competition, and banks need to introduce better man management policies to be competitive in a new banking era, Reserve Bank of India (RBI) Deputy Governor V Leeladhar said.

Launching the centenary celebrations of Managlore-based public sector Corporation Bank and delivering the foundation day lecture on "managing talent in banks", Leeladhar said, if banks manage the right talent, performance and compensation, they should be on the threshold of a brave new era in Indian banking.

Leeladhar said the roadmap envisaged for the Indian banking sector specifies that they have about five years to gear up to face challenges of unfettered competition.

Leeladhar said the centre has announced a slew of human resources autonomy incentives for banks that perform better as a step to push for major banking reforms in the country.

"Differential pay structures, lateral hiring, contract employment and perhaps, performance linked pay as a sub component of the compensation structure may turn out to be a potent talent management instrument in public sector banks," Leeladhar said.