From Chanda Kocchar to Shikha Sharma, the sheen has come off the banking sector recently. But experts say don’t read too much into it.
Mumbai: A study by executive search firm EMA Partners International a few years ago pegged the number of women CEOs in Indian companies at 11 per cent with more than half being from the banking and financial sector.
Over the last few months, however, the Indian banking sector seems to have lost some of its sheen as being the most gender diverse in its top management. In this period, some of the most celebrated women banking heads have either stepped aside amid controversies or retired.
Recently, the ICICI Bank board sent its chief executive Chanda Kochhar on leave till the completion of an independent probe into allegations of conflict of interest and impropriety against her. The charges against Kochhar are over her presence on a credit committee that sanctioned a Rs 3,250-crore loan to the Videocon Group. The loan ultimately allegedly benefitted her husband as Venugopal Dhoot of Videocon transferred the ownership of NuPower Renewables Pvt. Ltd, a joint venture between him and Deepak Kochhar, to the latter.
Last month, the Allahabad Bank board, on the government’s directions, took away all executive powers of its chief executive Usha Ananthasubramanian after the Central Bureau of Investigation (CBI) named her in the Rs 13,700-crore Punjab National Bank-Nirav Modi scam. Ananthasubramanian, incidentally the first woman to be elected as the chairman of the Indian Banks’ Association, was a former chief executive at the Punjab National Bank.
Axis Bank chief executive Shikha Sharma too will end her term in December this year, shortening her fourth term, following the Reserve Bank of India’s reluctance to approve the Axis Bank board’s proposal to give her a fourth three-year term. Even as the banking regulator did not spell out the reason for its reluctance, there is speculation that it was unhappy with some systemic lapses in the bank under Sharma’s leadership and a ballooning of bad loans.
A few other lauded women industry leaders in banking such as HSBC India chairperson Naina Lal Kidwai and State Bank of India chief Arundhati Bhattacharya have retired over the past three years.
Meera Sanyal, former chief executive officer and chairman of the Royal Bank of Scotland in India, said, “At one stage, there were more senior women bankers in India than anywhere else in the world and we all got there on merit. This is really a tribute to the chief executive officers who were there in the late 1970s and 80s such as N. Vaghul of ICICI or Ashok Dayal of Grindlays Bank who inducted a lot of talented women in the company and ensured that we were given equal opportunities to grow.”
Sanyal herself quit the banking sector in 2013 to be a full-time politician and unsuccessfully contested the 2014 Lok Sabha election as an Aam Aadmi Party candidate from the South Mumbai constituency.
The growth of women in Indian banking
Women in the banking industry say that it was Tarjani Vakil who broke the glass ceiling for them 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.
Following Kumar, several more women bankers reached the top echelons of the sector — H.A. Daruwalla took charge of the Central Bank of India, Nupur Mitra assumed leadership at the Dena Bank, Vijayalakshmi Iyer was chairperson at the Bank of India, Shubhalakshmi Panse headed the Allahabad Bank, Archana Bhargava was managing director at the Union Bank of India and so on.
Sanyal said leaders like Vakil or Usha Thorat, former deputy governor at the RBI, did a lot to open the doors for more women leaders. “They did a lot not just for women, but also for banking and financial inclusion. The right circumstances were created by very fair and visionary men, and also a generation of women who preceded us, fought the battles and broke the glass ceiling. Our role was then to create the same circumstances in our own organisation to help other women talent grow and flourish,” she said.
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.
According to a paper titled ‘Women Participation in Indian Banking Sector: Issues and Challenges’ published in the International Journal of Science and Research, the number of women employees in scheduled commercial banks more than doubled from 2005 and 2014, comprising about 22 per cent of the total workforce. Of the 2.77 lakh women employees in scheduled commercial banks in 2014, 1.29 lakh were officers.
J.N. Gupta, co-founder and managing director at Stakeholders Empowerment Services and former executive director at the Securities & Exchange Board of India (SEBI), said while a handful of names are celebrated, one has to think about why many women still do not reach the top.
“Out of India’s women population of 50 per cent, only a small fraction has a career orientation. There are family responsibilities and when women have children, they feel guilty if they are not being able to give them enough time. A majority of women succumb to that guilt and you lose the race for top even if you sit at home for 5-6 years,” Gupta said.
End of an era? Experts think, not
Even as different, unrelated circumstances have altered the top tier of the banking industry in recent months, Sanyal is 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,” she said.
“I 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,” she added.
Similarly, Gupta said one should not try to read too much into these coincidences because they are random and have nothing to do with the sector’s concept, organisation, system, choice or desire.
“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.”