A professional accountant-cum-compliance expert known to the present writer had been working at a bank in different capacities, including the Secretariat, Operations Department, Internal Control & Compliance Department and Merchant Banking Operation. One day the Managing Director who recently joined the bank asked him to resign. Being very gentle and humble, he submitted his resignation by showing deference to the new MD's request and left the bank where he made immense contributions. His loss of job in a bank is not an isolated incident. Rather it has become a common phenomenon in our banking profession.
This is certainly not a good practice and contrary to the development of quality human resource in the country's banking industry. Banks cannot afford to lose competent and experienced bankers when there is severe scarcity of quality banking professionals. Banking is an exclusive service industry where rendering prompt quality service is the key to success. Therefore, success in bank business inevitably requires employment of very competent banking professionals who not only provide quality services but also safeguard the bank's interests. However, competent and professional bankers cannot be groomed if congenial work environment with minimum job security is not guaranteed.
HUMAN RESOURCE POLICIES IN BANKS: During the last three decades, our banking sector has developed tremendously with more than fifty banks in operation. Hundreds of thousands of people are employed in this sector and many brilliant fresh graduates join this industry with great hope every year. However, proper human resource management system has not been developed yet in this industry, especially in the private sector banks. Hiring quality people through fair and competitive recruitment procedure, grooming and training them, and providing them with long-term career development opportunities are important criteria for proper human resource management. Almost all banks in our country maintain HR policies, but these are not consistent. For example, the HR manual sets the promotion criteria. If the number of officers and executives eligible for promotion are found to be very high, the HR manual is changed to limit the promotion. Moreover, the HR policies of many banks stipulate severing of employment by either party through prior notice. This kind of provision in the HR policies is supposed to be applicable whenever unavoidable situation arises for which the banks are under compulsion to downsize their operation. It is, however, alleged that this provision is sometimes abused for firing regular employees from the service of the banks.
JOB UNCERTAINTY AND BANKING SERVICES: Indiscriminately firing employees or forcing experienced and competent bankers to leave causes severe uncertainty among the bankers. With job uncertainty and concomitant frustration, bankers can neither provide prompt services to the customers nor can protect the bank's interest. In order to do so, bankers have to feel their ownership and be able to take firm decisions while discharging their professional duties. A banker will only take the risk of trading off between ensuring customer satisfaction and protecting the bank's interest if minimum job security is guaranteed. At present, we often experience deterioration of service quality in banks, increasing number of frauds, forgeries and loan defaults. Job insecurity of employees is considered to be one of the reasons for such malpractices. Today, branch managers can hardly refuse any request coming from the MD or Senior Management. Similarly, officers cannot refuse any request from the manager, regardless of whether it is viable or not viable, because they face the prospect of losing their job.
PRACTICES OF FOREIGN BANKS: While the present writer was discussing this job uncertainty issue with one of the senior bankers in Bangladesh, he told me that this malpractice was not found in foreign banks. But there is a fundamental difference between foreign banks and their offshore operations. Firing employees in foreign bank is the most challenging and difficult task, while hiring and firing are common practices in offshore operations. In the developed world, almost all counties have federal HR policies, which are mandatory for all private entities, and there is a common provision of severing employment by either party without prior notice. No private banks take the risk of firing people, because firing decisions move to the courts where judgments go mostly against the banks and in many cases banks are reprimanded heavily. Therefore, banks in the developed countries usually avoid firing people, although their own HR policies and even Federal HR laws permit it. However, where necessary, banks in the developed world do go through the complicated process of laying off employees.
One option is mutual understanding with the employee at a high cost of severance allowance, while the other option is restructuring and alignment of multiple departments. It may be mentioned here that restructuring and alignment of different departments is a common and popular measure in the corporate world of developed countries for making the employees redundant and for laying them off. One US-based large bank identified one of their employees as being involved in emailing the bank's information to an outsider, based on which The New York Times published an article that caused reputational damage to that bank. Nevertheless, that bank did not take the risk of firing that employee. Instead, the bank agreed to pay huge amount of severance allowance to convince the employee to resign from that bank.
Our banking job market is neither competitive nor vibrant like foreign banks. Consequently, our banking professionals hardly have opportunities for moving easily from one bank to another. Under the circumstances, our bankers suffer from job uncertainty and are always under threat of losing job.
NEED FOR HRM REGULATIONS AND TRIBUNAL: There is a discussion in relevant quarters on how to streamline our banking sector and bring back discipline in this area. In this context, developing standard and consistent human resource management (HRM) policies by providing minimum job security for bankers should be one of the top priorities. However, this minimum job certainty does not mean making the jobs permanent or perpetual as in the public sector. Of course, there should be adequate clauses with provisions for severe and stringent punishment in the standard HR Policies for dealing with the bankers who are involved in any type of activity that goes against the bank's interest, particularly offences related to corruption, fraudulent activities and violation of banking rules and regulations.
It is very unfair that employees working in a bank year after year do not have job security as they may be asked to leave at any time, whereas the MD of a bank enjoys job guarantee as they cannot be fired without prior permission of Bangladesh Bank. Moreover, in the eyes of law, a banker is always considered as quasi-public servant, because Bank Company Act 1991 has treated bank employee as public servant, and therefore the police cannot arrest a banker without warrant. Even those bankers who lose their jobs should have the legal right to get an opportunity for review. At present, there is no specialised legal establishment that allows review or appeal opportunity to the private bankers who lose their jobs.
Both the Bangladesh Bank and the government should look into this area and actively consider standardising human resources policies in the country's banking sector. Without ensuring minimum job security for employees in the private sector banks, discipline cannot be guaranteed in this area. The authorities should therefore actively consider introducing HRM regulations by incorporating all core HRM features. Among others, minimum qualification of bankers at every level, proper definition of termination clauses and minimum job security for the bankers must be included in the HRM Regulations for private banks. All private banks should then standardise or update their HR Manual based on the HRM Regulations enacted by parliament, which would supersede the bank's own policies.
Apart from this, the government should also consider establishment of Private Banking Service Tribunal with a retired judge as the Chairman, so that private bankers who lose job would have the opportunity to review their case. The country's financial sector cannot be run properly by keeping its employees and professionals insecure; so steps should be immediately taken for ensuring minimum job security for the bankers.
Nironjan Roy CPA, CMA is a banker working in Toronto, Canada.
