PSBs lure IIM graduates with seniority, better pay packets

Written by Sitanshu Swain | Mumbai | Updated: Aug 31 2009, 07:10am hrs
Public sector banks are bringing in competition in their management of employees by recruiting aggressively from the Indian Institutes of Management (IIM).

In a first, two of the top public sector banks Union Bank of India and Bank of Baroda have hired 70 students from IIMs this year, a record for them. All of them have joined the banks, confirmed a senior official handling human resource issues at one of the banks. While Union Bank has picked 50, BoB has taken on 20 from the institutes the top draw for campus recruitments for management positions by Indias corporate sector. The cream is usually picked up by financial sector companies including Wall Street investment firms. But the global meltdown dried up offers from those firms and created an opening for others.

However, the public sector banks have hardly pushed selection from these or even other management institutes aggressively in past years, except in their subsidiaries like merchant banking arms.

The offers were made at the same time as the two banks were recruiting officer trainees this year. To make the offers attractive, the banks have placed the IIM grads two ranks above the other officer trainees, which works out to about a 12-year seniority against other officer grade trainees. MV Nair, chairman and managing director of Union Bank confirmed the development. For those recruited from the top institutes, the bank has offered scale-III package.

MD Mallya, chairman and managing director of Bank of Baroda, said this was necessary as the recruits would be handling specialised desks including treasury operations and even overseas assignments soon. He is not fazed that there would be competition from the better paying foreign financial companies next year at the IIM campuses.

We dont consider the recruitments (this year) as one off. We would like to take this forward as a regular feature, every year.

For the public sector banks that pay a tremendous value on seniority to move up the corporate ladder, the decision was not easy. Nair says he is aware the new crop will be ready to vie for his post by the time they turn forty. This will surely bring down the threshold age for the chairmans position in public sector banks from the average of 53 years, by a decade or more. It will be good for the industry.

Nair himself is one of the youngest entrants to the chairmans room in the public sector, as is OP Bhatt, chairman SBI.

Mallya said all those selected have joined his bank. They are all keen to make their mark. He said even if one assumes a 20% attrition rate, the bank would have built up a sizable management pool fairly soon. Including the IIMs, the bank has recruited about 200 students in this special drive this year including those from other management institutions and engineers from IIT.

UBIs crop of IIM graduates includes other than Ahmedabad, students from Kozhikode, Lucknow, Kolkata and Indore. A senior official connected with the process said, the recruitment process for the current year is over now and they are projecting the targets for next fiscal.