Home / Industry / Banking /  Bank of Baroda to hire laterally for digi banking roles

Mumbai: Public sector lender Bank of Baroda (BoB) is set to accelerate lateral hiring in some verticals like digital lending and mobile banking, areas banks typically require specialists outside traditional banking roles.

While banks have been hiring directly from the market, these have largely been restricted to senior and vertical head roles. As part of its plan to hire laterally, Bank of Baroda now wants to empanel external human resource consultants to support this programme.

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Lateral hiring is the process of recruiting an expert for a specific role from another organization. In 2019, while announcing the merger of 10 public sector banks (PSBs) into four, finance minister Nirmala Sitharaman said that banks will also recruit a chief risk officer at market-linked compensation to attract talent.

“The banking environment has undergone a sea change in the last decade," the bank said in a document on 24 February. “The advent of technology, creation of new business arena, innovation in the products and service delivery and the competition has brought the banking sector to the brim wherein innovation and being pioneer has become the need of an hour in capturing the new business."

The lender which amalgamated with Dena Bank and Vijaya Bank in April 2019, had over 84,000 employees at the end of FY20. Its mobile banking customers more than doubled on a year-on-year (y-o-y) basis as on 31 December.

The consultant, hired to manage lateral hiring, will have to facilitate recruitment for junior and middle-level roles on regular or contract basis, not only for the bank but also its wholly-owned subsidiaries. “The bank has been recruiting personnel in the niche segments…and with bank scaling up its requirement to reach newer heights, it will require talented and experienced professionals in these verticals, especially in the junior and middle-level positions," said the document cited above.

In India, as elsewhere, digital banking as a stream of delivery has turned mainstream and banks need to invest funds and manpower in this area. Most private lenders in India and a few state-owned banks have been investing in digital banking, leading to majority of their transactions moving to electronic banking channels.

“As the threat of disintermediation by technology platforms becomes more real and as customer expectations for a seamless digital experience rise, banks cannot afford to stand still when it comes to digital and analytics, despite all the progress they have made to date," according to McKinsey Global Banking Annual Review 2020.

Employees hired laterally are typically paid prevailing market rates, higher than that of public sector banks. It is well-known that salaries of bank heads vary significantly between the public and private sector, with the gap widening over the last few years. A major component of the remuneration in private banks is through stock options for senior executives. Public sector banks have also been toying with the idea of an employee stock option scheme (Esos) to put in place a performance-linked incentive structure.


Shayan Ghosh

Shayan Ghosh is a national writer at Mint reporting on traditional banks and shadow banks. He has over a decade of experience in financial journalism. Based in Mint’s Mumbai bureau since 2018, he tracks interest rate movements and its impact on companies and the broader economy. His interests also include the distressed debt market, especially as India’s bankruptcy law attempts recoveries of billions worth of toxic assets.
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