After a long delay, nine state-owned banks are set to get non-executive chairmen with the government close to appointing retired bureaucrats and bankers for the top posts.
Former finance secretary Sumit Bose has been shortlisted for the post of chairman, Punjab National Bank. GC Chaturvedi, former Union petroleum secretary, is tipped to become the chairman of Oriental Bank of Commerce while TN Manoharan who is on the board of Tech Mahindra is likely to head Bangalore-based Canara Bank. Manoharan was appointed by the government on the board of the troubled Satyam Computer.
Former Microsoft India chief and director on the boards of Infosys and Volvo India, Ravi Venkatesan is likely to become the chairman of Bank of Baroda.
G Padamanabhan who recently retired as the executive director of Reserve Bank of India is tipped to become the chairman of Bank of India.
M Balachandran, who served as the chairman & managing director (CMD) of Bank of India (BoI) during 2005-2008, is being considered for the chairman position in the Chennai-based Indian Overseas Bank. Former Corporation Bank CMD B Sambamurthy is on top of the shortlist for the Andhra Bank chairman’s post.
The government is also considering G Narayanan for Vijaya Bank and TCV Subramanian for Indian Bank.
Under the new system, the chairman of a public sector bank will be a part-time board member presiding over board meetings and not as executive chairman. The government split the post of chairman and managing director in August last year after SK Jain, then CMD of Syndicate Bank was arrested for allegedly receiving a bribe, and shown the door. Private banks have already separated the posts of chairman and MD/CEO.
In 2004-05, the RBI set up a panel, led by AS Ganguly, to look into the separation of the post of chairman and managing director/CEO in banks. The panel suggested the separation for better corporate governance, following which in 2007, private sector banks implemented it.
A major complaint about public sector bank CMDs is the concentration of powers and their domination in board proceedings. The RBI had told the finance ministry to examine the issue of professionalising bank boards so that directors could be empowered to take independent decisions.
Finance minister Arun Jaitley had in the 2015-16 Budget announced setting up of Bank Board Bureau that would improve governance of public sector lenders. The proposed Board which would have six members with at least three former bankers, two professionals and secretary, Department of Financial Services as the government representative. Meanwhile, close to 50 candidates are in the race for the MD & CEO posts in five banks — Bank of Baroda, Canara Bank, Punjab National Bank, Bank of India and IDBI Bank. Suitable candidates will be selected through the old system as the Bank Board Bureau is yet to come up.