This refers to the report "Govt splits CMD's post in state-owned banks" (January 1). The government and Reserve Bank Of India must be congratulated for walking the talk by undertaking this long overdue reform of making the boards responsible for banks' performance. Contrary to general belief, bank chairmen will carry far greater responsibilities in giving proper directions to the banks and also keeping a close watch on the performance of full-time directors and senior officers. The new chairmen may be part-time directors, so to say, but they will initially need to spend a lot of time and effort in establishing new norms for the banks.
There shall also be an urgent need to restructure the board composition by bringing in professional directors. The government must look for talent from all management fields. Similarly, the chairmen will need to be given enough freedom to take the bank managements to task for their acts of omission and commission. For this experiment to succeed, the government will need to adopt a hands-off approach to managing public sector banks.
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There shall also be an urgent need to restructure the board composition by bringing in professional directors. The government must look for talent from all management fields. Similarly, the chairmen will need to be given enough freedom to take the bank managements to task for their acts of omission and commission. For this experiment to succeed, the government will need to adopt a hands-off approach to managing public sector banks.
Y P Issar, Karnal
Letters can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201 · E-mail: letters@bsmail.in
All letters must have a postal address and telephone number