Indian banks lead the world on gender equality

Why is India the best place in the world to be a female banker?

In some ways, 2013 was a grim year for women in India as a spate of gang rapes and sexual assaults tarnished the country’s reputation. But in one area it actually extended its position as an improbable world leader for gender equality: banking.

The latest leap ahead came in October, when State Bank of India, the public sector giant that controls nearly 20 per cent of the country’s banking assets, appointed Arundhati Bhattacharya as its first female head. But India stood out even before her arrival. Women already led three other large state-backed banks, as well as the nation’s first and third-ranked private institutions: ICICI and Axis.

The India outposts of many prominent foreign institutions are also led by women, including JPMorgan, Morgan Stanley and Bank of America Merrill Lynch. The chair of HSBC in India is female too, as is the head of the National Stock Exchange.

Taken together, India’s female-led banks control roughly 40 per cent of assets. “There isn’t another banking system in the world that comes close,” says Usha Thorat, a former deputy governor at the Reserve Bank of India and another prominent woman in the sector.

The pattern is equally unusual when set against India’s broader corporate scene, where major conglomerates remain almost entirely dominated by men, and ageing male tycoons typically hand businesses down to their sons. So what exactly is the banking system doing right?

Facebook’s Sheryl Sandberg suggests in her book Lean In that women are most likely to rise to the very top of their professions by asserting themselves forcefully at work – by speaking out at the office, for instance, or taking on tough assignments, even if they do not initially feel confident accepting them.

In India, however, it seems more likely that deeper changes in attitudes are also at play. SBI’s Ms Bhattacharya notes that she and many of her peers benefited from a social shift starting in the late 1970s, when some families began to encourage their daughters to work in relatively “safe” office-based sectors, like financial services, although they still were wary of manufacturing or heavy industries.

Once your family is the professional elite in Mumbai or Delhi, then whether you are a man or a women doesn’t really matter quite as much, so avenues begin to open up

Such changes were helped along by a second factor, says Devesh Kapur, a University of Pennsylvania political scientist, whose research suggests that other barriers in Indian business are more powerful than sexism. “Basically, class trumps gender,” he says. “Once your family is the professional elite in Mumbai or Delhi, then whether you are a man or a women doesn’t really matter quite as much, so avenues begin to open up.”

Particular institutions have also played a part. A striking number of the current crop of female leaders, including Shikha Sharma at Axis and Kalpana Morparia at JPMorgan, spent much of their careers at ICICI, a bank with an unusually progressive reputation for nurturing and mentoring talented women – another factor highlighted by Ms Sandberg as crucial for women’s progress.

These bridgeheads have in turn been boosted by a final factor: a plentiful supply of inexpensive child care options, including the continued prevalence of close-knit extended families, that particularly helps rising female executives. BAML’s country head Kaku Nakhate says that leaving her children with close female relatives lessened feelings of guilt about working long hours.

Some of these factors apply to sectors beyond financial services, while India’s profusion of senior female bankers disguises a much less rosy picture in lower levels of management. Roughly half of the annual intake of trainee bankers at institutions like SBI are women, but only a tiny fraction make it to the executive suite. Some in the industry worry that the shattering of India’s banking glass ceiling is more a trick of the light than a permanent breakthrough.

Ms Thorat warns that this generation’s success is more due to individual determination and talent, and has been achieved despite of, rather than because of, a banking system that remains heavily skewed in favour of men. India, she says, actually risks having many fewer female bank heads in future.

Such warnings are timely. Few banks in India show signs of copying the lead of players like ICICI and some institutions would do well to overhaul their efforts to mentor and promote promising female executives. The country has enjoyed a remarkable success in becoming, by some measures, the best place in the world to be a senior female banker. To sustain it, the banking system will need to “lean in” as well.

James Crabtree is the Financial Times’ Mumbai correspondent