Why are there so few women bankers?

US President Barack Obama last week nominated Janet L. Yellen to head the US Federal Reserve Board. If her appointment is confirmed by the Senate, Yellen would be the first woman to head the US central bank since the Fed became operational in 1914 after then president Woodrow Wilson signed the Federal Reserve Act into law on 23 December 1913. For the record, no woman has ever headed the US Treasury Department in its 224-year history.

add_main_imageIn the Reserve Bank of India (RBI), it was a 68-year wait for a woman to reach the deputy governor’s post. The central bank traditionally has one governor and three to four deputy governors to formulate monetary policy and run the banking system. RBI’s first woman deputy governor, Kishori J. Udeshi, took over in June 2003. Subsequently, two more women reached this tier—Usha Thorat and Shyamala Gopinath.

Against this backdrop, the State Bank of India’s wait of 206 years to get its first woman chairperson has been a bit longer. With Arundhati Bhattacharya, 57, moving into the corner office at the nation’s largest lender, women chief executive officers (CEOs) now control close to 40% of India’s banking industry assets. This is an interesting piece of information as women’s representation in the executive cadre of public sector banks, which account for about 70% of India’s banking industry assets, is less than 3%. They make up about 17% of the total workforce in the state-run banks. While their representation in the clerical cadre is a little over 26%, about 11% of officers in the industry are women. In private banks, the scene is somewhat better. For instance, in ICICI Bank Ltd, the nation’s largest private sector lender, women employees constitute roughly one-third of the workforce. NextMAds

Chanda Kochhar, managing director and CEO of ICICI Bank, will complete her first five years at the helm in May 2014. The bank’s board has already cleared another five-year term for her. The others who feature in the list of women heading commercial banks are Vijayalakshmi R. Iyer (chairperson and managing director, Bank of India); Shikha Sharma (managing director and CEO, Axis Bank Ltd); Naina Lal Kidwai (group general manager and country head, HSBC India); Shubhalakshmi Panse (chairman and managing director, Allahabad Bank); Archana Bhargava (chairperson and managing director, United Bank of India); Kalpana Morparia (CEO, JPMorgan India); Meera Sanyal (country executive and chairperson, Royal Bank of Scotland India) and Suvalaxmi Chakraborty (CEO of the Indian unit of State Bank of Mauritius)

Tarjani Vakil became the first woman to reach the top at Export-Import Bank of India in 1996. Four years later, Ranjana Kumar became the chairman and managing director of Indian Bank. She played a critical role in turning around the bank before shifting to National Bank for Agriculture and Rural Development in 2003. The second woman chairperson in a commercial bank, H.A. Daruwalla, reached the top in 2005 at the Mumbai-based Central Bank of India. After that, another woman, Nupur Mitra, headed Dena Bank.

Right now, women CEOs are managing four state-run banks, taking the total number to seven in the 44 years since India nationalized most of its privately run banks in 1969. It took 31 years after nationalization for a woman to become a bank’s CEO, but the pace of female professionals advancing to the top post has gained momentum since then. Very soon we will see one more woman boss in Usha Ananthasubramanian, an executive director of Punjab National Bank, when she takes over as chief of Bhartiya Mahila Bank, which is set to launch its operations in November. After that, there won’t be too many women advancing to the top as the pipeline is drying up. There is only one woman executive director in the state-run banking industry now—Krishna Guha, in Dena Bank.

There are not too many women in the top executive cadre—general managers—in the state-run banking industry. Overall, there are only 36 women among 630 general managers across banks. State Bank of India has the maximum number of women general managers—16 out of 138; Bank of Baroda, Canara Bank and Indian Overseas Bank have three each; and Punjab National Bank and Union Bank of India have two each. There are quite a few state-run banks where no woman is among the top executive cadre.

Why do very few women reach the top in the public sector banking industry? It’s the culture that comes in the way of a woman banker’s growth. One critical contributing factor is the transfer policy in banks. Typically, a bank officer needs to work at a dozen different places, including in a mandatory rural posting, to move up the hierarchy. In the absence of a support system, women officers invariably end up sacrificing their careers to look after their family and children. The situation in private sector banks is different. Take the case of ICICI Bank. It offers part-time employment and the option of flexible working hours for women employees. It also offers a sabbatical to women employees. Among other facilities, it gives paid maternity leave of six months which can be extended by taking leave without pay; child care leave of 36 days each year till the child attains the age of two; fertility leave of 180 days; and also adoption leave. Things are changing in the state-run banking industry, albeit slowly. To make a beginning, the banks have started offering a two-year sabbatical to their women employees. This can be taken at one go or in stages. This was done following the recommendations of a committee headed by former head of Bank of Baroda, A.K. Khandelwal, which looked into the HR (human resource) aspects of public sector banks a few years ago. Some banks, I am told, have started running crèches for the children of employees. More importantly, women employees now have role models before them to look up to, to chart out their career path.

Tamal Bandyopadhyay keeps a close eye on everything banking from his perch as Mint’s deputy managing editor in Mumbai. He is also the author of A Bank for the Buck, a book on HDFC Bank. Email your comments to bankerstrust@livemint.comsixthMAds