NEW DELHI, Nov 6: Finance Minister P Chidambaram has announced a package of greater administrative autonomy for public sector banks, especially with regard to recruitment of officers at different levels and promised to give them more freedom for improving performance.Addressing the annual meeting of heads of public sector banks here on Thursday, Chidambaram said that 11 categories of autonomy would be given to public sector banks fulfilling the criteria of capital adequacy of more than eight per cent, net profit for the last three years, Non Performing Assets (NPA) below nine per cent and minimum owned funds Rs 100 crore.The autonomy will be with regard to the opening of more branches without RBI's approval, promotion to scale four (deputy general manager) without any reference to the government, promotion from scale four to six by Departmental Promotion Committee (DPC) comprising bank chairman, RBI representative and government nominee and no RBI permission for travel of chairmen to overseas bank branches.Chidambaram added that banks which do not fulfill all the four criteria would be given only about five or six of the various categories of autonomy. As per the announcement made by the finance minister at the meeting, the banks fulfilling four conditions have been allowed to undertake campus recruitment of probationary officers and hire specialist officers for partly meeting their requirement of human resources. This, he said, was being done to enable the banks to cope with the challenges posed by the new environment.Among other things, the boards of the public sector banks have also been allowed to lay down policies in a large number of administrative and personnel matters including induction of specialists. They also have the authority to create posts below the level of general manager and have been granted permission to formulate their own policies with regard to rural positing of officers and deputation/lateral movement of their officers to other banks.Chidambaram also pointed out that in the wake of liberalisation and deregulation of financial sector, RBI had already given greater operational freedom to the banks in matter of deployment of funds.Many large banks like State Bank of India, several associate banks, Bank of Baroda, Oriental Bank of Commerce, Corporation Bank and Union Bank of India are likely to fulfill the four criteria and may qualify for administrative autonomy.The meeting, which was also attended by RBI Governor C Rangarajan, also discussed the prevailing credit scenario, the situation with regard to NPAs and priority sector advances with special reference to government sponsored poverty alleviation and self-advancement programmes. The other issues which came up for consideration were the situation arising out of the move towards capital account convertibility and the external pressures arising therefrom, the need for greater autonomy to banks, modernisation and customer services and improving internal control systems of the banks.
