Private Sector Bankers May Head Government Banks
NEW DELHI : As part of its move to reform the banking sector, the government may look at experts from the private sector for chairpersons in Bank of Baroda, Punjab National Bank and Canara Bank, sources told.
Prime Minister Narendra Modi will hold discussions with chiefs of public sector banks on Saturday to work out an action plan for reforms in the banking sector. The one-of-a-kind of retreat of bankers started today in Pune. Bankers will deliberate on issues such as consolidation, bad loans, financial inclusion, capital needs, human resources and technology.
The public sector banks are constrained by a pile of bad loans and are lagging private peers in profitability. Acknowledging the efficiency in the private sector banks, financial services secretary Hasmukh Adhia said there is a need to learn from the best practices from the private sector banks. The search committee for PSU bank chiefs may recommend changes in compensation structure to attract talent from the private sector, sources added.
In a break with tradition, the government on Wednesday split the post of Chairman and Managing Director for PSU banks and named MD-and-CEOs of four banks including United Bank and Oriental Bank of Commerce. For the first time, PSU banks will have a non-Executive Chairman, giving operational responsibility to Managing Director and Chief Executive Officer (CEO). The government instead wants to install non-executive chairmen at most public sector lenders. (With Agency Inputs)
