Competitive pressures from New Private Banks

Republic Bank of India (REBI), a ninety year old public sector bank, was facing competitive pressures from New Private Banks (NPBs) and also lagged on the technology adoption front. It was generally perceived to be laggards in technology based service delivery, with little focus on marketing and sales and suitable only for old generation customers.

REBI had not achieved good results in previous financial years showing Year-on Year loss of more than 20 percent in total business, advances, deposits, net profit and other income.

Part of the blame for this was put by the REBI enquiry on the company’s management culture. REBI was known for the strength and efficiency in branch operations however, was considered weak in reaching out to potential customers. Like any other PSB (Public sector bank), the bank had never felt the need to indulge in aggressive sales.

There was lot of burden of routine repetitive work of the branch personnel and they could not focus on managing customers in the branch. The ambience of the branch was never given importance for example:  the air conditioners in most of the bank’s branches were not functional. All this resulted in bad customer experience.

The corporate culture suffered from ‘broken’ performance management systems at the highest levels. As a cost cutting measure, Human Resources were not willing to invest in training programs. Many of the staff members were neither skilled nor trained in sales activities. Many even lacked the self-belief that they could conduct direct selling transactions. Branch managers were into their comfort zones. Those with several years of experience and adept at handling branch operations were not willing to move into field sales roles. Some of whom resented the extra pressure created by sales targets and customer issues.

Question 1: Based on the case study 1

You are the CEO of REBI and are looking at making the bank a profitable company in the next 3 years. Towards this goal, list the changes you would like to incorporate in the culture.  How would you bring about the change, discuss in relation to the frameworks of change management learnt in the class. 

Question 2: Application to your work environment

In your opinion what is the biggest challenge in relation to the culture in your company – please share an example. What changes would you make to make it positive? Discuss in relation to the drivers of culture.