The performance of PSU banks has been a big embarrassment for RBI. However, the largest shareholder in the banks, the government, seems to show no remorse, despite the fact that the problem of high NPAs in most of these banks has been traced back to bad lending. In most cases the PSU banks chiefs have colluded with corporates that eventually wilfully defaulted on loan repayment! That raises a doubt about the transparency in appointment of the bank chiefs. Most PSU banks chief are selected amongst the pool of few candidates who qualify based on hierarchical positions. There is therefore very little recognition of talent, skill sets or past track record. And according to an article in Moneylife, talent deficit has come to be the biggest void in PSU banks. For entities that corner 60% of the Rs 80 trillion banking sector, this should indeed be a big worry. However, the government has always preferred PSU bank chiefs who would rather pay heed to the North Blocks commands. It is time that with a change of government both the RBI and the Finance Ministry ensure that better talent finds its way to PSU banks.
Posted on: Tue, 15 Apr 2014 03:17:08 +0000
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