The Hurdle of Hierarchy: Banking in India

The Hurdle of Hierarchy

Take my money; pretty please!

I can still remember my surprise and frustration as I tried to help one of my employees, Faiz, open his very first bank account (he was 30 years old). We were working in North India, and I had a great relationship with the Premium Banking support personnel at our local branch of Axis Bank where I did my business banking. I was in for a confusing conversation! Faiz had been working for me for an entire year, and had a record of his pay stubs in hand. He also had ME, a valued business client at Axis, standing at his side as we chatted with one of my acquaintances at the Premium Banking desk. In the end, my bankhierarchy in india decided they could NOT open an account for Faiz. “We don’t do savings accounts for situations like this.” What?

Honestly, to this day I don’t think I can explain the reasoning that was presented to me at the Premium Desk. Faiz and I walked out of the bank; I was offended, but Faiz was not surprised in the least. “Sir,” he said, “bharat mein aise hain” (it’s just like that in India). A month later, we tried again at the State Bank of India. Wow. They were so unkind to Faiz, I could hardly believe it. You would have thought we were asking the bank for a loan (or for “free money”)! We just wanted them to help Faiz save a portion of his paycheck each week, so that he’d eventually be able to purchase a motorcycle for personal transportation. With the help of my secretary, Faiz made 3 more trips to the State Bank of India, and they reluctantly granted him a savings account.

Flat Societies vs. Hierarchical Societies

For those who are accustomed to the relatively “flat” structures in America, we can really get confused (or angry) when we run up against the strict hierarchy structures in other places. (My dad took me to the local bank in California when I was 6 years old, and with $12 dollars, they opened a savings account for me, and handed me the printed “passbook” within 10 minutes). The whole “hierarchy thing” is big in India, as people are assigned a particular status in life, and they are simply not permitted to move beyond it. A person’s gender, their last name, their particular job, and the type of education he/she has accomplished pretty much place a person “in their slot” and signal how all others should relate to them. Faiz was a blue collar worker back then, and that meant that just about everyone working at the bank (except those that swept and dusted) would naturally see themselves as superior and not obligated to serve him. There was no hiding it! Even if the bank clerk’s job was to attend to Faiz and open the account, that clerk probably felt an involuntary bias toward making things difficult for Faiz. Bharat mein, aise hain!

India: attempting to level the playing field

Last year, when Narendra Modi was running for Prime Minister of India, he made an offer of “bank accounts for all”, and he’s made SOME significant progress. But it’s still a pretty complicated picture. Here’s the video from the Wall Street Journal report earlier this month.