Old is indeed gold!

This is good news, not just for some of the best yet old brains of the Indian banking sector and also for the banking sector, that in the private sector, which is grappling with a dearth of talent.

The RBI last week hiked the age of retirement for heads of private sector banks, as well as CEOs and other whole-time directors, from 65 to 70 years. Some of the very well doing private sector banks have some of the best leaders and at this crucial juncture, when India is poised to make a mark on the global map, having the very same talent lead for some more time, is indeed a relief. Public sector banks continue with their retirement age of 60 years  and they are dealing a really serious deficiency of talent to fill up some of the top slots. Some 6 public sector bank chiefs are set to retire before the end of the current fiscal, which leaves around 6 months time to fill the slot.

There is a very telling survey conducted by McKinsey, which has stated that by 2016-17, some 87% of general managers, executive VPs are scheduled to retire and shockingly, 100% of them currently in these ranks would have retired by 2020. This is a massive hunt for talent which we are talking about. Here, knowledge alone, for these senior positions is not enough; knowledge has to be marinated with experience. Getting MBAs and other professionals is easy but getting the right person, with right qualification and experience is a herculean task.

Just like hiking the bar for private sector senior employees, it should be also be raised for the public sector banks. Many argue that seniors are old brains, not in tune with the changing times and they are unable to perform as well as the younger employees. Some even say that the older generation does not bring in fresh ideas and suffer from low energy. Well, look at Deepak Pareikh or Kamath or even Ratan Tata or for that matter, Warren Buffett.  They are many more unsung leaders are most certainly can give the younger ones a run for their money. Banking is a sector where many functions, especially the operational ones require a lot of experience. So lets try and keep the best brains in the sector and maybe leave it to the shareholders to decide when an able leader should retire – inefficiency or morality should be the reason and not age.