WOMEN IN FINANCIAL SECTOR : Breaking Barriers: The Rise of Women in the Banking Industry

  13 min 42 sec to read
WOMEN IN FINANCIAL SECTOR : Breaking Barriers: The Rise of Women in the Banking Industry

Nepal shines in terms of female workforce representation in commercial banks compared to other regional countries. Women occupy 42% of all roles in Nepal, ahead of Sri Lanka (38%) and Bangladesh (18%).

NewBiz Report

Nepal promulgated a new constitution in 2015 which mandated a 33% representation of women in all sectors. Despite this provision, many sectors still struggle to meet this target. The banking sector, however, has emerged as a notable exception.

Before 2015, women comprised less than 20% of the workforce in the financial services sector. Today, they represent 45%, significantly higher than the regional average of 20%. Moreover, women now occupy 25% of management positions, a significant increase from 9% recorded in 2014.

According to a latest report by the International Finance Corporation (IFC), Nepal's financial services sector stands out in South Asia for its remarkable progress in women's representation. The report titled "Women's Advancement in Banking in Emerging South Asian Countries" states that only Bhutan exceeds Nepal in women's representation, with women holding 46% of positions in financial services. However, Nepal shines in terms of female workforce representation in commercial banks compared to other regional countries. Women occupy 42% of all roles in Nepal, ahead of Sri Lanka (38%) and Bangladesh (18%).

Nepal also leads its neighbours in terms of representation in leadership roles, although it has yet to reach the global average. Women hold 23% of senior management positions in surveyed banks in Nepal, surpassing the figures of 20% in Sri Lanka and 12% in Bangladesh. The success of female participation in Nepal's financial service sector, as highlighted in the IFC report, is attributed to the country's robust legal framework promoting women's economic engagement. "The presence of dedicated laws, such as those ensuring parental leave for both women and men and prohibiting workplace discrimination based on gender, has laid a solid groundwork for women to actively participate and contribute to the industry," states the report.

Although Nepali law requires companies, including banks, to have at least one female board member, many Class ‘A’ (commercial) banks still lack female representation on their boards. Globally, women hold 28% of senior leadership roles in commercial banks, a benchmark Nepal is striving to achieve. Aarti Rana, the Chief Business Officer of Laxmi Sunrise Bank Ltd, says there has been a noticeable climb for women into leadership positions. “Two decades ago, the landscape was vastly different from what we see today. The transformation is significant even if we compare data from five years ago. Although the numbers in leadership roles remain modest, they are poised to grow as the influx of women into the industry has surged,” she said. “Today's women are not only smart but also highly talented. With the current entry rate of 45% for women into the banking sector, we can anticipate a greater presence of women in leadership positions.”

Leadership roles remain low

Section 86 (2) of the Companies Act, 2006, states that a public company's board should consist of at least three and at most eleven members, with at least one female director if the company has female shareholders. However, the annual supervision report of the Nepal Rastra Bank (NRB) states that some banks do not have any female directors as required by the Companies Act. Two out of the 20 commercial banks currently in operation do not have any female directors: Himalayan Bank and Global IME Bank. Among private banks, Nepal SBI Bank and Laxmi Sunrise Bank have two women each on their boards. Additionally, 15 banks have only one female director each.

Pranisha Shrestha, the Head of Brand and Marketing at NMB Bank Ltd, acknowledges the existing barriers despite the increased participation of women in the banking sector. “However, there have been many positives in the last decade or so. A decade ago, we could not have imagined women leading a branch. Now, women constitute 12-15% of the workforce in leadership positions at NMB Bank,” Shrestha said. “The total composition of women is 39%.”

The representation of women on bank boards may see improvement with the proposed amendment to the Banks and Financial Institutions Act (Bafia). The amendment aims to enhance female representation by requiring at least two women on bank boards - one representing shareholders and another from the expert group. According to the IFC report, female bankers in Nepal encounter barriers to progression, not due to lack of ambition. However, limited representation in senior roles and a decline in the proportion of women advancing from entry-level to senior-level positions suggest that fewer women are ascending to leadership roles compared to men.

Women's representation in the surveyed banks declined from 46% at the entry-level to 27% at middle-level management and 23% at senior-level management. "Among female employees, 79% of respondents expressed their desire to advance to senior roles in the industry, yet very few actually progress to such positions," the report states.

While the hiring rate is promising, it has yet to achieve parity with men. In terms of recruitment, although Nepal is not the regional leader, women make up more than one-third of new hires in the industry. In 2022, among the banks surveyed in Nepal, 39% of all entry-level recruits were women, compared to 46% in Sri Lanka and 22% in Bangladesh. While women are making strides in breaking the glass ceiling, the societal framework often demands that women make sacrifices for their families. “Even male counterparts sometimes anticipate that their wives will prioritise child upbringing by either quitting their jobs or taking career breaks. As a result, women often pause their careers, and upon return, they find themselves at a disadvantage,” Shrestha said. “The overarching societal structure has also impeded the progression of women towards top leadership positions.”

Barriers abound

Women bankers in Nepal face numerous interwoven barriers that hinder their professional advancement. These challenges emerge early in their careers and persist at various stages, and disadvantages them compared to their male counterparts in terms of career progression and professional outcomes. Additionally, these obstacles contribute to a sub-optimal daily work experience for women in the banking sector. According to Rana, if there is a good support system from family and society, representation always increases. “In many cases, even when women are talented, they could not climb the ladder due to a lack of support. Nepal is still a patriarchal society, and in many cases, women have to quit jobs after pregnancy or when their husbands go abroad in search of better opportunities. They have to quit their careers to support their families,” she added.

These barriers encompass inequitable hiring practices, insufficient professional development opportunities, socio-cultural constraints, biassed evaluations and non-conducive work environments. The IFC report states that women are often disadvantaged at the very first step - i.e., gaining a foothold in the industry - as many recruiters hold unconscious biases. Women taking career breaks also make it difficult to resume work, it added.

Namita Dixit, a former banker, says that the growth of women's participation is substantial at the entry-level as both girls and boys are receiving equal education. “With the increase in girls' enrollment in school, it is natural that they will seek jobs after graduation as they become educated. However, the problem arises after marriage when women's responsibilities double, as they must manage both family and career,” Dixit, who served as Chief Risk Officer at Nabil Bank, said. “Women often handle household chores, while men do not in many cases. As a result, men have ample time to study and develop their careers. Meanwhile, women experience fatigue and the burden of balancing both home and office work.”

Most employees believe men and women have an equal chance of being hired, although there are hiring gaps for senior roles. According to the IFC report, 66% of female and 87% of male respondents believe that women have the same chance of being hired as men in their organisations. While women make up 39% of entry-level recruits across surveyed banks, this figure drops to 17% for new hires at middle and senior management levels.

Looking ahead

Despite the existing barriers, support from individuals, organisations and workplaces can play a crucial role in empowering women and increasing their representation in leadership positions. Experts point to structural obstacles within many sectors which can disproportionately affect women. These barriers include rigid work schedules and a lack of supportive policies, particularly for those striving to achieve a work-life balance. The absence of flexible work arrangements, adequate childcare options, and inclusive parental leave policies can create significant challenges for women seeking to advance in their careers, experts say. According to Rana, support systems play a crucial role in increasing representation. “At Laxmi Sunrise Bank, we have been focusing on women’s leadership development and on making the bank more inclusive. We celebrate Diversity Day, we have a mother’s room and childcare system to support women. These efforts help women,” she added.

At NMB, bringing more and more women into leadership roles has been the objective to empower them. “We have women branch managers in all seven provinces of the country. Likewise, we have launched a ‘Women Leadership’ program under which we train 30-50 women every year to take up leadership positions. They are trained on how to tackle difficult situations,” Shrestha said. “To prevent women from being left out in difficult situations, we have been providing work-from-home options depending on the nature of their work and job roles.”

Recently, the bank also changed the role of a branch manager to a relationship manager when she was pregnant so that she could work from home, Rana said. “The bank has been creating such an environment to give value to women because they are an integral part of the organisation," she added. Another significant problem for women is that if they take a career break after pregnancy or to raise children, they often get left behind. This is where banks as well as other industries should be flexible, Dixit said. “They have to start fresh again. Given the small job market and the large number of aspirants, women returning to work may struggle to catch up. This is where the problem lies,” she added. 

Aarti Rana
Chief Business Officer
Laxmi Sunrise Bank

Women have been climbing up the ladder in leadership positions. Two decades ago, the situation was not like it is today. Even when comparing the data from five years ago to today, the difference is substantial. Though the numbers of women in leadership positions are still low, they will likely increase as the entry rate for women has also risen. Women today are smart and talented. Currently, the entry rate of women in the banking industry is 45%, so there will potentially be more women in leadership positions in the future.

If there is a good support system in place, representation of women is certain to increase. In many cases, even when women are talented, they could not climb the ladder due to a lack of adequate support. Nepal is still a patriarchal society, and in many instances, women have had to quit their jobs after pregnancy or when their husbands go abroad in search of better opportunities. They have sacrificed their careers to support their families.

Though there have been significant strides toward gender equality, the gap still exists. However, women also need to be bold, stand up and advocate for themselves in order to overcome these challenges. At Laxmi Sunrise Bank, we have been focusing on women's leadership development and on making the bank more inclusive. We celebrate Diversity Day. We have a mother's room and childcare system in place to support working women. Having said this, in the banking sector, women should also understand that focus, dedication and a willingness to devote time are necessary requirements. You need to have the skills to lead and guide a team effectively. 

Pranisha Shrestha
Head of Brand and Marketing
NMB Bank Ltd

There are barriers, obviously, though the participation of women has increased in the banking sector. However, there have been many positives in the last decade or so. A decade ago, we could not have imagined women leading a branch. Now, women constitute 12-15% of the workforce at leadership positions at NMB Bank. Likewise, women comprise 39% of the total workforce. At NMB, we are always conscious of bringing more and more women into leadership roles. We have women branch managers in all seven provinces of Nepal. We have launched a 'Women Leadership' program under which we train 30-50 women every year to take up leadership positions. They are trained on how to tackle difficult situations.

To prevent women from being left out in difficult situations, we have been providing work-from-home options depending on the nature of their work and job roles. In one case, we changed the role of a branch manager to a relationship manager when she was pregnant so she could work from home. The bank has been creating such an environment to give value to women because they are an integral part of the organisation. Though women are breaking the glass ceiling, the overall structure of society often requires women to sacrifice for the family. Even male counterparts expect that their wives should take responsibility for child raising by quitting their jobs or taking a career break. When women take breaks from their careers, they are already left behind when they rejoin. The overall structure of society has also hindered the growth of women reaching the top leadership positions. 

Namita Dixit
Former Banker

At the entry level, the growth of women's participation is substantial, as both girls and boys are receiving equal education. With the increase in girls' enrollment in school, it is natural that they will seek employment after graduation. However, the problem arises after marriage when women's responsibilities double, as they must manage both family and career obligations.

Women often shoulder the burden of household chores, while men frequently do not contribute in many cases. As a result, men have ample time to focus on their studies and career development. In contrast, women experience fatigue and the challenge of balancing both domestic and professional work. To address this issue, I believe that men should share household responsibilities to support the career development of their partners.

Another significant obstacle for women is the potential career setback they face if they take a break after pregnancy or to raise children. They often have to restart their careers from the beginning. Given the small job market and the large pool of job seekers, women returning to work after a career break may struggle to catch up with their peers. This is where the crux of the problem lies. 

No comments yet. Be the first one to comment.
"