PRIVATE SECTOR PROFESSIONALS TO HEAD PSBs.

[PM]

FOR INFORMAION:

                                           Now it is the turn of  people from out side to run banks!

                                                       'In a significant change of policy, government has roped in private sector professionals to run two of its largest banks — Bank of Baroda and Canara Bank — as it announced appointment of MDs and CEOs of five lenders.The move is seen as a part of process to reform the public sector banking industry, which accounts for over 70 per cent of the banking business, but struggling to deal with mounting non-performing assets.In past, public sector banks heads were selected from among the state-run banks or government officers.

                                                    Apart from these two banks, Financial Services Secretary Hasmukh Adhia also announced names of MDs and CEOs of Bank of India, IDBI Bank and Punjab National Bank. These three executive heads are serving officials in other government-owned banks.In addition, Adhia also announced appointments of non-Executive Chairman at Bank of Baroda, Bank of India, Canara Bank, Vijaya Bank and Indian Bank.

                                       The government also picked up private sector executives for the post of non-Executive Chairman of Bank of Baroda and Canara Bank.Managing Director and CEO of VBHC Value Homes Pvt Ltd P S Jayakumar (53) has been selected to head Bank of Baroda. MD and CEO of private sector lender The Laxmi Vilas Bank Rakesh Sharma (57) will head Canara Bank.M O Rego (Deputy Managing Director, IDBI Bank), Kishore Kharat Piraji (Executive Director, Union Bank of India), and Usha Ananthasubramanian (CMD, Bhartiya Mahila Bank) are the new MD and CEOs of Bank of India, IDBI Bank and Punjab National Bank, respectively.Rego and Ananthasubramanian took charge today.Ravi Venkatesan (51), Independent Director, Infosys has been appointed as non-Exeuctive Chairman of Bank of Baroda. T N Manoharan (59), Director, Tech Mahindra, Public Health Foundation is non-Executive Chairman of Canara Bank.G Padmananbhan (Retired ED of RBI), G Narayanan (Retired ED, Indian Overseas Bank) and T C V Subramainian (Retired CMD, Exim Bank) have been appointed as non-Executive Chairman of Bank of India, Vijaya Bank and Indian Bank, respectively.Five MD and CEOs were appointed earlier.The government had decided to separate the post of Chairman and Managing Director by prescribing that in the subsequent vacancies to be filled up the CEO will get the designation of MD & CEO and there would be another person who would be appointed as non-Executive Chairman of PSBs.

                                          “This approach is based on global best practices and as per the guidelines in the Companies Act to ensure appropriate checks and balances. The selection process for both these positions has been transparent and meritocratic.“The entire process of selection for MD and CEO was revamped. Private sector candidates were also allowed to apply for the position of MD and CEO of the five top banks. Three stage screening was done for the MD’s position culminating into final interview by three different panels,” Adhia said.

-Finacial Express 15th Aug 15.

[Ramachandran Menon]

Time tested and most efficient senior executives are there empanelled in each bank waiting for their own career advancement whereas some outsides who are totally new to the culture of the individual banks have been posted as EDs and CMDs of large public sector banks. Will they reduce the NPA or increase. Are the bank funds to be played around like this. Ultimately for not making profits or for increasing the NPAs they will block the salaries of the employees and officers. As per the Xth BPS they proclaim SP allowance as a greatest achievement, whereas there is an addition of only 2% to the pay attracting DA. Merril &Lynch say that the 7th bipartite may bring forth an increase of more than 39% and which may add up upto 1% to the GDP. They expect a revival of transport sector and the real estataes secor. IBA abd UFBU were able to make Xth bipartite negotiations a big thamasha. Under their effcient leadership, the bank will never recover and become healthy. 

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[L S RAMAN]

Bank management  requires specialised inputs and experience in relevant areas of credit and all other funcional requirements to be aquired through intensive on the job training in a PSB, AND EXPERIMENTATION BY APPOINTING PRIVATE SECTOR BANKING PERSONNELL TO HEAD PSBS MAY LEAD TO COSTLY ERRORS  AFFECTING THE BUSINESS OF BANKS AFFECTING THE INTEREST OF EMPLOYEES AND THE PRIVATED SHARE HOLDERS

. G.O.I, SHOULD HOLD ITSELF ACCOUNTGABLE TO THE CONSEQUENCES 0F SUCH EXPERIMENTATION.

hAVING GIVEN AN ASSURANCE TO THE PSBS LAST YEAR AT PUNE THAT GOI WOULD NOT INTERFERE WITH THE MANAGEMENT OF PSBS THIS INITIATIVE OF RADICAL CHANGE IN THE MATTER OF APPOINTMENT OF cHAIRMEN  IS AGAINST THE ASSURANCE GIVEN IN THE PRESENCE OF THE hON P.M.

DR.RAMAN.L.S.