Private
banking is the fastest growing segment in the banking
industry, but PSUs like SBI have not been able to make
a dent in this segment. That's because of their inability
to hire talent at market rates, reports CNBC-TV18.
According
to a study conducted by DSP Merrill Lynch and Cap Gemini,
there are 83,000 millionaires in India. This segment they
say is growing at 19 per cent, but only 10 per cent of
these High Net-worth Individuals are being tapped and
that too by private and foreign banks.
PSU
ginats like SBI have tried to make an entry; SBI launched
a pilot project in 100 branches in select urban areas
and has 3,000 of its employees certified by the IRDA and
AMFI to sell insurance and mutual fund products.
According
to sources at SBI, this pilot project has failed to take
off because of a lack of skilled and trained financial
advisors or relationship managers.
Senior
PSU bankers echo this sentiment and say that they haven't
been able to hire capable relationship managers who can
offer specialised advice to High Net-worth Individuals
as they are unable to pay them high compensation packages.
While
a relationship manager at a private or a foreign banks
earns from Rs9 to Rs12 lakh a year, a PSU bank official
of the rank of deputy general manager makes only Rs2.5
lakh per annum.
Since
the strict service rules don't allow banks to pay more,
SBI is now seeking to work around this issue by using
its wholly owned subsidiary SBI Commercial and International
Bank, for its wealth management business.
SBI
sources say since SBICI is a private bank, it will be
able to hire
the much needed sales force on competitive compensation
packages and hopefully make a dent in the private banking
space.
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