At a time when public sector banks are relying on voluntary retirement schemes to shed excess staff, retail banking specialists are find themselves in vogue.
With banks going ballistic on developing the retail business, there has been a spurt in staff poaching. The trend is more prominent among new generation banks. In the process, salaries of retail bankers have risen manifold.
The retail head of a foreign bank operating in India for more than 50 years in Kolkata was lured by a huge hike in pay to switch over to a rival bank. He joined the bank along with his team.
But soon the same executive with his team in tow shifted loyalties to yet another new generation bank. Of late, this team has moved from the third bank to a fourth - and the whole migration took place within four years.
Many banks work on the belief that customers are loyal to employees who manage counters and their relationship manager, and not the bank. This is exactly why they paid teams to move, hoping that a critical client mass would switch from one bank to another within the same location.
In fact, the phenomenon is not limited to banks. Retail sectors such as hotels and some non-banking financial companies (NBFCs) too adopting the same tactic. The hike in pay packet is to the extent of 20 to 25 per cent in most cases.
This movement is not restricted to chiefs or branch managers. There has been significant movement among people with three to seven years experience in the asset and liability business as well. Performers are wooed by hefty salaries and promotions.
The trend gained ground few years ago when banks simultaneously embarked on developing retail business. At the level of a branch manager at a typical new generation bank, compensations have risen about four times between 1996 and 2001. The rise however has come only through movement and not through growth in the same organisation.
In the case of senior managers, salaries have risen three-fold. For example, Joy Basu, regional manager of Gariahat branch, UTI Bank, was offered a lumpsum hike by IndusInd Bank when the latter set up shop right opposite IndusInd's branch. With competition in the retail sector hotting up, poaching is going to be the name of the game.
