Human Resources Accounting Practices in Indian Banking : An Exploratory Study

Abstract

Indian Banking is as old as any other banking system in the world and it is following various Human Resources Development (HRD) practices. The latest trend in HRD practices across the world is Human Resources Accounting (HRA) and today every organization is looking to understand their HR value in monetary terms as well. The banking industry which is service oriented and depends on mainly Human Resources (HR) is no exception to this trend, and must look into their HR valuations particularly due to changing economies and business models where mergers, acquisitions and takeovers have become the order of the day.

The present study focused on finding out and understanding the HRD practices of banking in India, with a special emphasis on HRA practices. Primary data were collected through interactions with various employees working in the HR departments of banks and secondary data were collected from various published documents, such as financial statements, journals, and other periodicals. The study’s main findings were that: (1) Each bank has its own methodology in HRD practices for developing their HR; (2) No single bank is using HRA as a tool in the organization for HR valuations; (3) The majority of the officers is not aware of the availability of such a tool for HR development; and (4) No specific/ separate data are captured by the banks for the purpose of HRA.

It was concluded that Indian banks need to focus on HRA practices for developing their HR in a systematic and organized way, to promote their HR as Intellectual Capital and to give it a prominent place in their financial reporting.

Keywords : HRD, HRA, Intellectual Capital, Banking