The finance ministry today announced a new set of norms for public sector banks to grant them more managerial autonomy.According to a release posted on the website of the Press Information Bureau, the finance minsitry said: "With a view to enable public sector banks to be better equipped with greater operational flexibility to transact business more efficiently, the government has issued a blueprint in making room for such autonomy to provide the public sector banks with a level-playing field so as to compete effectively with private sector banks in India."The boards of public sector banks will enjoy freedom to carry out their functions efficiently without any impediment, subject to statutory requirements, government policy prescription and regulatory guidelines issued by RBI from time to time. "Banks will be allowed freedom of action in the following areas:-1) Pursue new lines of business as part of overall business strategy.2) Make suitable acquisitions of companies or businesses, close/merge unviable branches, open overseas offices, set up subsidiaries and exit a line of business. 3) Decide all human resource issues relating to the bank, including the staffing pattern, recruitment, placement, transfer, training, promotions, pensions etc. 4) Prescribe standards for categorisation of branches based on volume of business and other relevant factors. 5) Prescribe essential academic qualifications, minimum qualification standards and modalities of promotion/recruitment to various categories. 6) Undertake visits to foreign countries to interact with investors, depositors and other stakeholders. 7) Lay down policy of accountability and responsibility of bank officials. "The board of directors of stronger banks with capital adequacy ratio of 9% or more, net NPA of less than 4%, net profits over the last 3 years and minimum owned funds of Rs 300 crore will have additional autonomy for framing their own HR policies and procedures for recruitment, for creating additional posts of General Managers, for sanctioning differential pay linked to performance within the pay scales decided after negotiations and for deciding the amount of contribution to be made to the staff welfare fund."
