PSB-CMD/ED Appointments New norms soon for PSU bank directors, CMD post to be split (ToI) Stung by the alleged Syndicate Bank bribery scandal, the government has decided to split the post of the chairman and managing director. The chairman would be a reputed person from the industry or a professional while the MD would have a fixed term of three years, which can be extended by two more years. The government may also bring a provision to transfer an MD if a bank slips A new set of guidelines is also expected to be announced shortly for appointment of independent directors on bank boards. TOI was the first to report on August 6 about the appointment of politicians, TV anchors and others on bank boards. It has been proposed to make the boards free of any political interference and induct reputed professionals such as economists, management professionals and other experts. There is also a move to limit the number of chartered accountants on bank boards. A fresh set of guidelines have been sent to the Appointments Committee of the Cabinet (ACC) and would be announced as soon as the department gets ACCs nod. The idea is to ensure that there is no political interference. The government is very concerned about the bank boards,” said a senior official, who did not wish to be named. The government is set to revamp appointment of independent directors to public sector bank boards. Over the past few years, every bank board has seen a series of appointments of individuals who seem to have little to do with the sector. Good talent has eluded state-run bank boards. Inde pendent directors are expected to bring in expertise from their respective fields and provide an oversight on the management. Similarly, appointment of executive directors would also be revamped. Sources said EDs would be expected to be experts on risk management and would have to have a track record on managing risks. TOI was the first to report about the planned changes for the CMDs role on July 16. The proposal to split the post of CMD is on the lines of private banks and is expected to impart professionalism and certainty of tenure. Short tenures at public sector banks are often seen as a major drawback given that their private sector players have CEOs who not only have time to prepare a strategy but also implement it. ICICI Bank, for instance, gave Chanda Kochhar a five-year term in 2009. At rival HDFC Bank, Aditya Puri has been at the helm since 1994. In contrast, SBI chairman Arundhati Bhattacharya has a tenure of three years, leaving her former boss O P Bhatts five-year term as the longest ever.
Posted on: Mon, 18 Aug 2014 02:56:53 +0000
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