Continuing trend: Centre’s nominees giving key banks’ board meets a miss

Govt nominees have also been absent from several board meetings of SBI and PNB.

Written by Pranav Mukul , Sunny Verma | New Delhi | Updated: May 9, 2018 2:00:59 am
Continuing trend: Centre’s nominees giving key banks’ board meets a miss During 2016-17, government nominees on ICICI Bank’s board did not attend any of the nine meetings. In 2015-16, the nominee attended only two of 10 meetings and in 2014-15, the two nominees attended two out of seven meetings.

Absence of Department of Financial Services Joint Secretary Lok Ranjan from ICICI Bank’s board meeting on Monday was not a departure from the recent trend of Centre’s nominees on the lender’s Board of Directors missing the meetings.

During 2016-17, government nominees on ICICI Bank’s board did not attend any of the nine meetings. In 2015-16, the nominee attended only two of 10 meetings and in 2014-15, the two nominees attended two out of seven meetings.

While the Centre has its nominees appointed on boards of all public banks, it has its representative on ICICI Bank’s board given the “too big to fail” status of the “systemically important bank”. Till September last year, ICICI was the only private bank with the status until Reserve Bank of India added HDFC Bank to the list. State Bank of India is the only other such bank.

Ranjan’s absence from the board meeting was raised during the analyst call with ICICI Bank’s MD & CEO Chanda Kochhar who confirmed that Ranjan did not attend.

Other than ICICI Bank, the government-nominated directors have been absent from several board meetings of SBI. In the last three fiscals for which information is available, Centre-appointed directors attended two of 15 meetings in 2016-17, none of 11 in 2015-16 and three of 12 in 2014-15. However, the attendance record of Centre’s nominees at the board meetings of Punjab National Bank was better than ICICI Bank and SBI. In 2016-17, government nominees attended 13 of 16 board meetings; in 2015-16 they attended nine out of 13 and in 2014-15, they were present at seven out of 11 meetings. The data on directors’ attendance was sourced from annual reports of the respective banks.

The government nominees on the boards of these banks are appointed as independent directors. As per the Companies Act, one of the primary objectives of the independent directors is “to help in bringing an independent judgment to bear on the board’s deliberations especially on issues of strategy, performance, risk management, resources, key appointments and standards of conduct”.

Notably, the Centre’s nominees on the boards of ICICI Bank and SBI attended more meetings during the last three years of UPA-II than they attended in the first three years of the current government.

During the first three NDA fiscals, government-nominated directors attended four of 26 ICICI Bank board meetings, while in the three preceding years — 2013-14, 2012-13, 2011-12 — eight meetings were attended out of 17. Similarly, in case of SBI, five board meetings were attended out of 38 in the first three NDA years, while in the final three UPA-II fiscals, the government-nominated directors attended 21 of 37. For PNB, the Centre’s nominees attended 29 out of 40 board meetings during 2016-17, 2015-16 and 2014-15, while they attended 32 out 38 meetings during 2013-14, 2012-13 and 2011-12.

For all the latest Business News, download Indian Express App

Share your thoughts
Advertisement
Advertisement
Advertisement
Advertisement
Adda
Advertisement