Needed: A uniform system of recruitment, promotion in banking industry

Bangladesh undertook reform of its financial system quite boldly. It allowed private commercial banks in different phases since mid-90s, privatised state-owned banks, converted the Nationalised Commercial Banks (NCBs) to limited companies, strengthened capital market structure by means of adopting updated regulatory frameworks, formulated stringent investment policies for banks in line with capital base etc. A sustainable long-term expansion of the financial system requires a more substantial change in the role of the government. In an era of open market economy, generally the role of any government or central bank is more of a facilitator than of an operator or arbitrator.

There is a debate whether economic development follows development of financial system or financial system's development follows economic development. Whatever the conclusion of this debate is, Bangladesh has observed a tremendous development in financial sector since independence. After independence, except the foreign incorporated banks, all the local banks were nationalised. All these banks were divided into 06 commercial bank groups. Afterwards, of those 06 banks, ownership of Pubali Bank Ltd and Uttara Bank were transferred to the private sector from January, 1985. It was the beginning of a new era based on which banking industry flourished in Bangladesh.
On the other hand, banking sector has experienced several upheavals too. Some of the banks were merged i.e. Bangladesh Shilpa Bank and Bangladesh Shilpa Rin Sangstha were merged as Bangladesh Development Bank Limited from 2010 and its category was changed from specialised bank to state-owned bank from April-June 2015 quarter. The same happened to BASIC Bank Ltd. Earlier it was treated as a specialised bank but following a scam in January-March, 2015 quarter, the government decided to treat BASIC Bank as a state-owned bank. Some banks were renamed after some reforms. Oriental Bank Ltd was renamed as ICB Islamic Bank Ltd from April-June, 2008. Some banks changed their mode of operation from conventional to Islamic Shariah banking i.e. EXIM Bank Ltd started its operation according to Islamic Shariah from conventional banking from the July-September quarter, 2004.
The government has so far allowed banking business licenses in four phases termed as 'Generation' and at present 56 scheduled banks are operating their businesses in Bangladesh. These banks are operating under full control and supervision of the Bangladesh Bank which is empowered to do so through Bangladesh Bank Order, 1972 and Bank Company Act, 1991. Scheduled banks are classified into the following types:
Other than these scheduled banks, there are now 4 non-scheduled banks in Bangladesh which are:
1) Ansar VDP Unnayan Bank,
2) Karmashangosthan Bank,
3) Probashi Kolyan Bank and
4) Jubilee Bank
As per the Bangladesh Bank's statistics, as on June 30, 2015, total number of branches including Head Offices, Islamic windows and SME service centres stood at 9,131:

Like all other organisations, banks also follow organogram. Jobs are classified with different designations. Full name sof present ladders of major banks are as follows:

While the Bangladesh Bank follows one type of hierarchy, the state-owned banks another type of hierarchy. Most of the private banks follow another type of hierarchy. Nothing is uniform though all of these institutions belong to the same industry. Let's examine the ladder system of all the scheduled banks operating in Bangladesh and the central bank as well.

The Bangladesh Bank recruits some personnel below officer grade like Door Keeper / Mali / Khedmotgar, Jomader / MLSS,  Caretaker- 2nd Class, Caretaker- 1st Class, Data Entry / Control Operator, Clerk- 1st Grade etc. Basically, the Bangladesh Bank practises one of the excellent hierarchical methods. For example, it recruits officials for different purposes/ wings like general, administrative and technical purposes. For example, Assistant Directors are the future leaders of the central bank who will be promoted to Deputy Director to Joint Director to Deputy General Manager to General Manager to Executive Director to Deputy Governor. On the other hand, the Bangladesh Bank also has Assistant Managers/ Assistant Programmers/ Assistant Maintenance Engineers/ Senior Computer Operators who are equivalent to Assistant Directors. These posts have the same hierarchy in different names. Theoretically, all of these ladders may be reached usually up to the ladder namely 'Deputy Governor". It has become a common phenomenon that up to Deputy Governor, the Bangladesh Bank's own employees are accommodated and usually the post 'Governor' is selected by a search committee and recruited from outside the bank in line with the ruling government's vision.
HIERARCHY OF STATE-OWNED BANKS: After independence, ladders of state-owned banks were almost the same. But now-a-days, various  banks follow different hierarchical options. At present, all of these four banks have some clerical posts below Officer who were recruited earlier but these banks are not recruiting for these posts any more under the same name. The present hierarchy of the four  state-owned banks is as follows:

HIERARCHY OF PRIVATE COMMERCIAL BANKS: As per the Bangladesh Bank's 'Scheduled Banks' Statistics' (SBS), private commercial banks are divided into three categories:
a) Foreign Banks
b) Private Banks (Incorporated in Bangladesh excluding Islamic banks) and
c) Islamic Banks
HIERARCHY OF FOREIGN BANKS: Different foreign banks operating in Bangladesh have different types of hierarchy. Some of them have ladders like local private commercial banks and up to a certain level they have designated manpower. After that, next level senior posts are not available for Bangladesh operation. On the other hand, in some banks top level positions like Country Head/ Country Manager/ General Managers are from the originating country and in some banks these posts are also represented by Bangladeshi personnel. To some banks like HSBC and SCB, they have operational and functional designations like Relationship Officer, Relationship Manager, etc. but they unilaterally  follow 'Broadbanding Policy' for classifying their ladders under 'Bands'.

In Standard Chartered Bank, Band-6 level officials are treated as Executives and get car allowances. In HSBC, Band-6 officials get partial car allowances but Band-5 officials get full car facilities. On the other hand, in Citi N.A Bank, Resident Vice Presidents get car allowances. Five other foreign banks also have their own policies regarding employee benefits.
HIERARCHY OF PRIVATE COMMERCIAL BANKS (INCORPORATED IN BANGLADESH EXCLUDING ISLAMIC BANKS): Right now except Islamic banks, 31 private commercial banks are operating in Bangladesh. The ladder system of these banks is as follows:

HIERARCHY OF ISLAMIC BANKS: Hierarchy of the eight Islamic Banks is as follows:

In most of the banks, two types of recruitment prevail. Junior level officers are employed for execution of regular activities with slow career growth. The Bangladesh Bank itself has junior level recruitment. It recruits Data Entry Operator, Stenographer, Clerk-1st Grade and Cash Officer/ Officer which are below Assistant Director. Besides these posts, the central bank has to recruit some personnel like Data Entry / Control Operator, Clerk- 1st Grade / Senior Data Entry Control Operator / Stenographer/ Typist / Telephone Operator etc. On the other hand, to execute managerial job tasks and to lead the banks in future, the management recruits some employees as 'Management Trainee" or "Probationary Officer" whose career progress is expected to be smooth and faster. Even the Bangladesh Bank also resorts to this recruitment process. It recruits 'Assistant Director' as future leaders. These two types of recruitment usually may be compared with armed forces recruitment process like non-commissioned and commissioned officer rank.
In some of the banks, Management Trainees or Probationary Officers are confirmed as Senior Officers and in some cases as Executive Officers. For example in UCBL, MTs are confirmed as Executive Officer and in IFIC Bank, as Senior Officer. On the other hand, in Islami Bank Bangladesh Limited, Probationary Officers are confirmed as Officer. Mockingly, it is also found that one bank's SAVP is equivalent to another bank's FAVP in terms of hierarchy, remuneration and other benefits. Interestingly in reality, due to this abnormality, some banks' SAVPs join as AVP in other banks. Availability of car facility usually defines the 'Executive' post of any bank. In most banks, AVP is the beginning of Executive post, to some banks like Bank Asia and FAVP the starting of Executive post. In case of foreign banks like HSBC and SCB, Band 06 employees and in case of Citi N.A Resident Vice President (RVP) gets car allowances. In case of Sonali Bank, AGMs are entitled to get car loan without interest and maintenance fee as well. On the other hand, though Assistant General Managers of Rajshahi Khishi Unnayan Bank are entitled to get car facility, yet in practice all AGMs usually do not get car facility.
In some banks, separate organogram is followed for Cash Department most people deal with and to some people representation of Cash Department's Officers is ultimately the representation of the image of any bank. Some banks recruit separate employees besides the mainstream for Cash wing where career progress is like Cash Officers = Officers (Cash) = SOs (Cash) = POs (Cash) = SPOs (Cash) who don't get promotion above SPO and are very rarely absorbed in the main stream.
All the banks have written promotion policy but very few banks follow it exactly. Some banks give promotion after two years and some after three years. Some banks exercise promotion procedure after two years for Non-Executive positions and three years for Executive positions. Some banks arrange promotion-related activities once a year and some arrange twice. Some banks execute the process with the shortest possible time and some take huge time. Ultimately, banks follow their own culture. Collectively to say, employees' satisfaction may not be 100 per cent regarding promotion and in reality it is not possible too, but it may be reduced in different ways. Now-a-days like foreign banks operating in Bangladesh, some of the local private commercial banks are introducing "Broadbanding Pay Structure Policy". EBL, City Bank and Prime Bank are pioneers in introducing this policy. Under this policy, besides regular designation, employees are termed as Assistant Managers, Managers, Senior Managers, Executives, Senior Executives and so on. If Management can't give promotion to any employee due to organogram or other reasons, or don't feel like giving promotion then financial compensation is one of the major alternative tools for retention of the performing employees. As a smart tool of identity, some of the local banks will adopt this 'Broadbanding Policy' within the shortest possible time. For example Broadbanding structure of one of the local PCB is as follows:

In case of recruitment, some common phenomenon is prevailing in the industry. Usually, Management Trainees and some of the Junior Officer Batches are recruited through vigorous competitive examination process. Other than this, lower level recruitment takes place without proper recruitment process, without competitive exam, with reference from boards of directors of the banks, through nepotism and bribery. Political pressure and lobbying by the government high-ups guide promotions in NCBs.
In some banks, AVP is the beginning of Executive posts and in some cases FAVP or AGM is the starting point. In some banks, there is no FAVP designation, in some banks FAVP is before AVP or AVP is before FAVP. These create confusion regarding designation of bank Officials. In other cases, dissymmetry in ladders of different banks creates confusion while switching one bank to another. As a result, one might get positive benefit and other may experience the opposite. In some cases, due to group movement, some officials can reap maximum benefits by switching organisation. Senior Officer of one bank comes to another bank as AVP with only 2-4 years' experience. This destroys balance among the existing officials. In some cases, such folks get benefit not only for their expertise but due to their relationship with the seniors. There is no problem at all if real performers get expected benefits. These types of quick movers actually don't mingle with existing employees who usually can't trust or tolerate newcomers who got unusual benefits. As a result, there remains a constant gap in the colleagues' relationship because of leg-pulling culture. It is observed that in most of the cases these groups of quick movers again move to another bank with higher benefits and as they never try to consider the new organisation as their own like those officers who started their career with that bank.
Considering the practical problems, the central bank may take initiatives to introduce a uniform ladder system for the banking sector. If a unique ladder system is adopted then transparency will  increase and will be beneficial to all the related stakeholders. Moreover, it might help weave an effective structure of the financial sector.
The writer works in Credit Risk Management of a private commercial bank.
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