The State Bank of Pakistan has asked all banks to enhance coordination with banking institutes, management schools and universities, to design specific courses for bankers.

Banks can do so individually or collectively from the platform of the Pakistan Bankers’ Association.

The SBP guidelines have come amidst a fast-changing banking environment and ahead of intense banking activity forecasted for the 10-year $51bn China-Pakistan Economic Corridor projects.

Whereas development of soft skills is very much required, bank employees must also know, and should be able to conduct, hard-core banking … That’s where one sees lapses due to lack of training

All banks have been asked to ensure compliance to the SBP guidelines from the beginning of next year.

From routine bank branch operations, complex treasury settlements, e-banking, more challenging risk management and cyber-security and almost all other areas of banking; lots of changes have taken place in the banking industry since mid-1990s, when the banking system saw its last major reformation.

The banking business now requires the right blend of professional skills, the integrity of bank employees and the use of fin-tech. The current set of SBP guidelines are general in nature, but after sometime, a more elaborate set of parameters for bankers’ training and development may be issued after taking banks onboard, senior central bankers say.

Banks are now required to maintain a periodic management information system (MIS) exclusively for training that the SBP inspection teams would review during on-site inspections.

The “MIS has to be maintained at the most granular level possible to allow performance evaluation” a clause of the guidelines reads. The SBP now wants to monitor how many employees of a particular bank have been trained in a particular area or sub-area of banking and whether that training has been imparted internally or externally or within the country or abroad.

According to central bankers, this will help SBP diagnose whether a certain bank is under-performing in a specific area because its employees are not trained enough; Or whether, there are other, more serious, reasons.

Banks routinely explain away an array of irregularities with the excuse that the staff handling a certain piece of work had made an inadvertent mistake. But often, particularly in case of banks that concede to political interference, that innocent mistake later on turns out to be the cover-up for a bigger and more serious banking crime.

The central bank’s guidelines will help detect such ploys, more so because it stresses the point that the MIS on training must make it clear what kind of training was imparted to which cadre of employees (staff, middle management or senior management).

“The dictates of a knowledge-based global economy are such that the mind has literally taken over the matter,” says the head of a local commercial bank. “Constant learning is the key to success in any profession. Banking is no exception.”

Sadly, though, our banks are not providing tailor-made, effective training to their employees. Even in cases, where employees are being groomed constantly “the focus is more on soft skills and less on hard core banking”, veteran bankers lament.

Besides, the scope of training generally remains limited to upper middle managers. Tens of thousands of bank staff either get little or no training at all. As a result, bank customers suffer.

Whereas development of soft skills is very much required, bank employees must also know, and should be able to conduct, hard-core banking—ranging from accounts management and payment settlements, to periodic multiple reporting under matrix management, to compliance of SBP rules and regulations.

That’s where one sees lapses due to lack of training, executives of banks admit. Financial and computer literacy, application of financial mathematics, proficiency in English, remaining abreast with the latest internal codes of business and SBP guidelines are the things that matter most in banking. “But most bank employees are found wanting in some of these areas,” according to a former SBP executive director.

Once compliance of SBP guidelines has been ensured by banks, “some improvement can be expected in the medium to long run.”

Retention of the best talent in banking has always been a challenge. And, this challenge is growing because banks have not been providing the kind of career development opportunities that young, well-educated bankers look for. As a result, job-switching is rampant. In many cases, bankers are even trying their luck in the non-bank corporate sector.

There is no proper career development of those who receive training, young bankers complain.

The SBP guidelines provide for separate training budgets, at the level of a bank’s board, and the monitoring of its utilisation.

Published in Dawn, Business & Finance weekly, October 10th, 2016