Chanda Kochhar, Usha Ananthasubramanian and Shikha Sharma were powerful faces and celebrated as pioneers in India’s financial sector. These were on top among the handful of powerful Indian women who had occupied the corner offices in an industry that had till then been another male bation for nearly a decade. Their climb to the top positions of India’s biggest banks have inspired countless young women. But now, it is certainly not a good time for Indian banks battling one storm after the another over the past few months as these big names are in the eye of the storm as they’re involved in the turbulence — scams, toxic assets, and sinking profitability.
A few other lauded women industry leaders in banking such as Naina Lal Kidwai and Arundhati Bhattacharya, also retired over the past three years.
With these big names out of the picture, There are now no women at the top at any Indian public or private bank. The question lies, Why have these women bankers fallen from grace?
India’s most iconic banker, who’s been the leading lady of the ICICI Bank since 2009 holding the position of managing director and CEO, Chanda Kochhar – is perhaps the biggest name to come under the cloud following allegations of nepotism in the disbursal of a loan. After backing their CEO, the bank finally agreed for an external inquiry.
Kochhar is now on leave till a probe to ascertain her involvement is concluded. Chanda, a padma shree awardee, has been with the bank since three decades, joining the erstwhile bank in 1984. She had played a major role in building the bank’s retail business and has recently demonstrated how quick decisions can help in effective resolution of bad loans.
In the meantime, the bank has created a new position and appointed Sandeep Bakhshi as whole-time director and chief operating officer.
In February this year, Indian banking industry was rattled by a $2 billion fraud—the biggest in the country’s banking history- came to light at the Punjab National Bank. Over seven years, the bank was allegedly defrauded by two diamantaires, Nirav Modi and his uncle Mehul Choksi. The CBI, in a charge sheet filed in May, named Usha Ananthasubramanian, a former chief executive at the bank, as an accused.
Ananthasubramanian, who holds master’s degrees in statistics and ancient Indian culture, was at the helm of the bank between August 2015 and May 2017, when the fraud was in full swing. She was the head of Allahabad bank and so was stripped of all her executive powers. She allegedly ignored several red flags raised by the RBI over lapses in the bank’s security which allowed funds to be transferred fraudulently via the SWIFT system, a messaging service used for cross-border transactions.
Usha, an industry veteran, was chosen in 2013 to head Bharatiya Mahila Bank, which later was merged with State Bank of India (SBI).
In July last year, Axis Bank re-appointed its chief executive and managing director Shikha Sharma for three years from June 2018. It was her fourth three-year term. She has come under the scanner due to the lender’s poor performance in the last few years. The Reserve Bank of India was reportedly hesitant about granting her another term as chief despite the board’s approval. Reasons include the bank’s performance and its deteriorating asset quality.
When Sharma was appointed Axis Bank’s MD & CEO in 2009, its chairman and CEO PJ Nayak resigned well before the end of his tenure. He was not happy with the appointment of an outsider. Sharma was managing director and CEO of ICICI Prudential Life Insurance. But Sharma pushed aggressively for growth, which helped her build the business.
She acquired Enam Group’s investment and broking business after succeeding Nayak, propelling Axis to the top position in equities advisory and mergers and acquisitions and brought about various changes under her leadership.
These developments are coming at a time when the country is already grappling with a gender-diversity problem: India ranks fifth from the bottom out of 35 countries in terms of women in leadership roles.
Why do very few women reach the top in the public sector banking industry?
Culture comes in the way of a woman banker’s growth. Transfer policy in banks is one critical contributing factor. 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, few offering part-time employment and the option of flexible working hours for women employees. Also, a sabbatical to women employees. Among other facilities, they give paid maternity leave of six months which can be extended by taking leave without pay; childcare 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. More importantly, women employees now have role models before them to look up to, to chart out their career path.
The growth of women in Indian banking
Tarjani Vakil was the one who broke the glass ceiling for women by being the first woman to reach the top at the Export-Import Bank of India in 1996. Other than that, it was only 31 years after the nationalisation of banks in 1969 that a woman banker occupied the corner office of a scheduled commercial bank with the appointment of Ranjana Kumar as the chairman and managing director of Indian Bank. Several more women bankers reached the top echelons of the sector following Kumar — H.A. Daruwalla took charge of the Central Bank of India, Vijayalakshmi Iyer was chairperson at the Bank of India, Shubhalakshmi Panse headed the Allahabad Bank, Nupur Mitra assumed leadership at the Dena Bank, Archana Bhargava was managing director at the Union Bank of India and so on.
Experts said leaders like Vakil or Usha Thorat, former deputy governor at the RBI, did a lot to open the doors for more women leaders. Names such as Zarin Daruwala, Standard Chartered India CEO, Kalpana Morparia, JP Morgan India CEO, and Kaku Nakhate, country head of Bank of America Merrill Lynch in India still dominate the Indian banking landscape.
Not the end
Even as different, unrelated circumstances have altered the top tier of the banking industry in recent months, experts are optimistic that it is not the end of an era for women leaders. “At the induction level, you have 50 per cent women. But a lot of them drop out when they get married or have children. As leaders in the banking industry, we created those kinds of flexible working environments that not just enabled women, but also men to balance their homes and careers,” said the expert.
We don’t see any reason why we should not continue to see more talented women rise to the top in banking and other industries because we have a talent pipeline. We have very talented women at the entry level and now policies conducive for them to rise. Don’t say this is the end of an era because the era in the real sense is yet to begin. These three or four names who are moving out of top positions are just a handful among the hundreds of names in the country. The era will begin when we have at least 20-25 percent women CEOs in different sectors. In that sense, we are just in the initial stages of an era of gender diversity.
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