HDFC Bank CEO Jagdishan emphasises work culture, warns transgressors

HDFC Bank’s managing director and CEO Sashidhar Jagdishan

HDFC Bank’s managing director and CEO Sashidhar Jagdishan on July 19 warned managerial level employees of transgression from good working culture saying he is aware of such instances and has the resolve to ‘nip this in the bud.’

“I am fully conscious of the fact that there may be instances where some people managers might transgress our defined way of working,” Jagdishan said in his message to shareholders on July 19.  “We have the resolve to nip this in the bud, both by way of training/counselling and appropriate action, to ensure that the same is not attempted by anyone else,” Jagdishan said.

Jagdishan, however, added that the bank has ‘some distance to traverse on this front.’ “We are taking concrete steps towards building an inclusive organisation, which will go a long way in reining in attrition in the coming years,” he added.

Why the comment is important

The comment from the CEO assumes significance in the backdrop of an incident recently circulated on social media with respect to the alleged unruly behaviour of one of the senior executives of the bank towards junior staff.

HDFC Bank on June 5 suspended the concerned officer in Kolkata for allegedly engaging in unruly behaviour with colleagues during an internal meeting. In a video circulating on Twitter, the officer was heard shouting at his junior colleagues for not selling enough banking and insurance products.

In a statement made available to Moneycontrol, HDFC Bank said that on the basis of a preliminary enquiry into the matter, the concerned employee has been suspended and a detailed investigation has been initiated which will be undertaken as per the Conduct guidelines of the bank.

The banking major further added that they have a zero-tolerance policy for any form of misconduct at the workplace and firmly believe in treating all our employees with dignity and respect.

In the video, the manager was asking his junior employee said, "I don't understand, today you're going to do 25 smart ones, 25 sure covers, and 25 health covers."

Misselling complaints

Incidents of product misselling have been reported across the banking industry. In the past, there have been instances where life insurance policies were sold to customers aged above 75 years in Tier II-III cities. Usually, branches of the banks push products of their subsidiary insurers.

Bank executives face immense pressure from top management to sell third-party products like insurance. Failure to meet targets invites informal penal actions while meeting targets brings perks such as parties in five-star resorts.

Banks typically cross-sell insurance products of their subsidiaries, and sometimes of other companies, along with loan products. Many a time, banks insist purchase of policies along with loan products. Early this year, the RBI had conducted a meeting with the board of directors of all public sector banks and private banks to discuss issues related to governance and ethics.

Emphasis on culture

In his message, Jagdishan stressed the importance of good working culture saying that it defines the experience of each employee.

“Managers are uniquely positioned to represent the culture the Bank stands for. Talent, Potential and Capabilities can best be harnessed through an enabling culture,” Jagdishan said.

Towards this aim, the bank has adopted the managerial behaviour architecture based on the principles of 'Nurture, Care and Collaborate', said Jagdishan, adding that this should translate into simple behaviours that managers can demonstrate in their interactions with their teams. The Nurture, Care, Collaborate initiative that covered over 12,000+ managers in the previous year was extended to the senior leadership levels and over 6,000 new managers in FY 2022-23, the CEO added.

“The intent is to have all managers at the Bank equipped to fully live the cultural ethos of the Bank,” Jagdishan said.

Increase in attrition

Jagdishan said the bank has experienced an increase in attrition over the last financial year, a significant part of which was in the ‘non-supervisory staff’ levels, including sales officers.  Jagdishan attributed Covid as one of the reasons for high attrition that may have prompted the younger workforce to recalibrate what they ‘want from their lives’, the CEO said.

“This has led to increased attrition across all sectors. It is a reality that all major employers are grappling with, especially in the BFSI sector,” Jagdishan added.

Earlier, in an interaction with the media, the bank’s chief financial officer, Srinivasan Vaidyanathan had said that the lender witnessed a 30 percent employee attrition in the fiscal year 2022-23.

“On average, we saw the attrition rate at around 30 percent. Highest attrition was seen at the entry-level positions, which stood at around 40 percent to 50 percent,” Vaidyanathan said at a post-results media call.

A few levels above the entry-level, Vaidyanathan said that the attrition rate is around mid-20 percent to 30 percent, the CFO added.

HDFC and HDFC Bank got merged effective July 1, marking a major event in India’s banking sector. Post-merger, the loan book or advances of the merged entity jumped by 38.77 percent to Rs 22.21 lakh crore as against 16 lakh crore as on March 31, as per investor presentation of the bank.

The merger gave HDFC Bank entry to India's booming housing loan market while for HDFC, the decision made sense on account of vanishing regulatory arbitrage earlier available for non-banking finance companies.