Bandhan Bank to start training school for bankers

Microfinance institution-turned-bank will offer a one-year training programme to young graduates and hire them as assistant managers on successful completion of course


Bandhan Bank said the programme will cost Rs350,000 per selected candidate, adding that it would provide loans, or ‘bridge’ funding to those who cannot afford to pay. Photo: Indranil Bhoumik/Mint
Bandhan Bank said the programme will cost Rs350,000 per selected candidate, adding that it would provide loans, or ‘bridge’ funding to those who cannot afford to pay. Photo: Indranil Bhoumik/Mint

Kolkata: Bandhan Bank on Friday said it would start its own training school for bankers, potentially adding a new revenue stream to its operations.

The microfinance institution-turned-bank will offer a one-year residential training programme to “young graduates” and hire them as assistant managers on successful completion of the course.

The programme will cost Rs350,000 per selected candidate, the bank said, adding that it would provide loans, or “bridge” funding to those who cannot afford to pay.

Investing in training leads to faster growth among peers in a wide variety of businesses, said Sandeep Chaudhary, CEO of Aon Hewitt Consulting, which has advised Bandhan Bank on hiring. “If you look at organizations such as ICICI Bank and State Bank of India, they’ve always invested in talent from the entry level,” he said.

Several private sector banks offer training to new and potential recruits, but this is normally done through external institutes.

Bandhan Bank’s capacity to provide training was ramped up substantially when it transformed itself into a bank in August last year. It hired several retired bankers to help with the transition.

As an MFI, one of Bandhan’s key strengths was training. It has 8-9 training centres which could potentially turn into independent profit centres with the lender launching its own school.

Though it has obtained professional advice from consulting firms such as Aon Hewitt, Bandhan typically relies on its own resources to impart training to its officials. This has helped Bandhan grow rapidly without compromising on its asset quality, said MD Chandra Shekhar Ghosh.

Ghosh said that the school would be run by an arm of Bandhan Bank, and not the lender directly. It would start in January with a batch of 30 selected on merit, but eventually training capacity would be scaled up to 240 a year.

The bank will pay a stipend to people who enrol from the very first month, Ghosh said. Skill development on the job takes time, so it is preferable to train people before they start work, he added.

However, some staffing experts said Bandhan Bank’s training programme, which comes with the promise of employment for successful candidates, might not conform to International Labour Organisation (ILO) norms.

The ILO convention does not appreciate people paying in any form to secure a job.

Such a model is not advisable in principle, according to Rituparna Chakraborty, executive vice-president (staffing) of TeamLease Services Ltd.

She said it is better to outsource training, which is the dominant model in India.

The skill development programmes run by banks are normally shorter in duration, said Kunal Sen, senior vice-president (permanent recruitment) at TeamLease, adding that the pricing of Bandhan’s course appears to be steep.

More From Livemint