Centre gets professional

One hopes that the changes like the proposed Bank Board Bureau are successful

The appointment of private sector professionals as managing directors, CEOs and non-executive chairmen, etc., of public sector banks is a bold and dynamic move. Only the future will tell if this succeeds in shaking up the complacency and lack of innovative thinking among heads and top executives in PSU banks. Since seniority, and not meritocracy, was the criteria for appointments to top-level bank positions, there was neither incentive nor accountability. The government provided an unending bailout package. This also suited the various governments of the day as they and the political elite used banks and other public sector corporations as feudal preserves for themselves and their cronies.

The Narendra Modi government is trying to bring in a revolutionary change but there will have to be a total change in the mindset of bureaucrats and politicians to see that this change is followed in spirit and practice. There will have to be zero political interference and the banks should not be expected to be instruments for the implementation of the government’s political and social welfare measures; these agendas should be provided for in the Union Budget and banks reimbursed.
It is a matter of concern that the new thinking in the government over the last 15 months didn’t prevent the SBI from entering into a controversial loan deal with industrialist Gautam Adani for financing an Australian venture that was shunned by global and Australian banks because of huge environmental issues that would make it difficult for the project to take off. But this change was necessary. One hopes that this and other changes, like the proposed Bank Board Bureau and employee stock auction, are successful.

( Source : deccan chronicle )
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