Download Beyond Banking South Asia Expereinces

“BEYOND BANKING”
BANKING ON SOCIAL ORIENTATION
SOUTH ASIA EXPERIENCES
asia & pacific
Professionals & Managers Contribution for
Sustainable Business Growth in South Asia
UNI Europa & World
Professionals and Managers Conference
15-16 April 2013, London
Jayasri Priyalal
Director for Finance, Professional & Managers
UNI Asia & Pacific - Singapore
Presentation Outline
 Significant Gaps in Finance Industry in South
Asia
 Trends – Successes Failures – Contributions of
Unionized Professionals & Managers through
Officers Associations in Banking Industry in India
 Organizing Challenges for trade unions – Case
studies from – India, Nepal & Pakistan
 Way Forward – Owning the Agenda – Voice and
Space for P&M for sake of – SENSE of
Community
Significant Gaps
 Financial Exclusion – 612 Million Adults in South Asia – Have
no access to savings or credits – 59% SME have no loan or
overdraft – Source IFC statistics -Unbanked and under banked
 Drift towards Class Banking – from Mass Banking – Limited
Credit flow SME’s- Banking Industry Consolidations in Urban
areas
 Focus on FEE based income – Moving away from financial
intermediation to stimulate growth in real economy – Credit
for Priority Sectors - market forces to provide
 As per WEF Global Risk Report 2013 – “Severe Income
Disparity” most likely risk to happen in TEN years
Trends – Past Present & Future – Based on INDIA
Post Independence to
Nationalization of Banks
1969
Business in Concentrated in
few Industrial houses
3% Credit to Agriculture –
647 towns in India NO bank
branches, 444 towns NO
Banking Services
• Capital infused in Banks
by Private Industrial
houses was ONE %
total deposits but
enjoyed 62.7% credit in
the economy
• No Professional
Management and
training to assist Rural
Development and
Agriculture
PAST
Post Nationalization
1991 1st Wave
Liberalization
• Out 0f 62000 Bank
Branches 35000 were
Rural (58%)
• Rural Deposits
increased 6%to 15% Credit increased from
3% to 15%
• Nationalizations
Objectives Achieved
With the Support
Participation of - All
Officers Associations in
Banking Industry
• 2002 - Private Sector
Banks Starts – Shift
from
• Mass to Class Banking
Banking Reforms
Private & Foreign Banks
8% in Rural Areas are
(as per licensing norms
25% in un Banked areas)
As at June 2009
80000 Bank Branches
Private Sector owns 10%
Between 2004 –2009
Loans Below 25K Rupees
6.5% Increase
Loans Below 200 K
55% Increase
Hub & Spoke Business
Models in Private Banks
2nd Wave –2012
Consolidation attract FDI
Mergers& Consolidation
Limits Financial Inclusion
Savings Drying
Consumption Driven
Banking Model
– Neglect Real Financial
intermediation- instead
Sales and High Fees –
Speculation Short
Termism
Myth Market OR Bank
based Finance Industry in
INDIA?
No Trade Union s in
Private Banks – Officers
Association under
attack
PRESENT
UNCERTAIN
FUTURE
CHALLANGES
Challenges – Case Studies – Way Forward
United Forum of Bank Unions (UFBU )in India – Including the Officers Association
are Opposing the new Banking Industry reforms in India.
All India Bank Officers Confederation (AIBOC) Commissioned a study on Banking
Industry Reforms in 2006
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•
•
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Private Sector Banks have NO Unions - State Owned Banks lose Talent
No Industry wise compensation schemes - Performance Based
Compensations are attractive to young professionals
15% Attrition amongst New Recruits to SBI – - 80000 New Recruits in 2012
Divided – Jurassic Trade Union movement needs infusion of new blood –
Young Employees have different expectation – Challenge the Status Quo
Talent Shortage – Frustrated Employees Joins the Competitor
• State Bank of Pakistan – Branchless Banking Expansion through Mobile
Phone Banking – 69% accounts belongs to people live on USD 3.75 a day45% users Previously unbanked – 1.4 million accounts June 2012 • Nepal – All Private Insurance Companies are unionized and have
collective Agreements – Unique Strategy – First Organize the Regulator
UNI Apro Finance Convenes – 4th South Asia Finance Sector Unions Council
Meeting on 5th May 2013 in New Delhi – Share Experiences & Strategies
UNI Apro Finance – Lobby for Responsible investment of Pension Funds with
ADB – Together with Civil Society Organization
Alarming Facts for Finance Industry Professionals &
Trade Unions
Sovereign
Savings
US$ 5.2 Tn
Sovereign
Wealth
Funds
Source : The City UK Research Organization
Workers
Savings
US$ 33.9 Tn
Global
PENSION
Funds