Public bank CEOs may get 5-yr tenure

CEOs of public sector banks are set to get a longer stint at the top. The Reserve Bank of India (RBI) today called a meeting of chairmen of public sector banks to discuss the human resources report prepared by the sub-committee of the appointments board of the finance ministry.

According to banking sources, one of the major recommendations of the report discussed at length was giving a fixed tenure to the bank chairmen of five years. Sources said the proposal suggested that the fixed tenure be made applicable from 2007 onwards.

Another major recommendation was widening the pool of talent and human resource for selecting people for key positions in the banking industry.

The suggestion is allowing senior cadre of the RBI and State Bank of India to be appointed as executive directors and chairmen of public banks with the approval of the appointment board.

This can start from the level of general manager, said informed sources. If this is accepted, senior executives of the RBI and SBI will have growth opportunities, said sources.

Alternately, the committee is also in favour of senior executives of all public sector banks being deployed at RBI and the State Bank.

By offering a larger tenure, the panel feels the level of commitment and accountability of the CEOs will increase. Further it will also give them enough scope to take actions to move the bank.

The appointment board is chaired by the governor. Other members of the board include the finance secretary and joint secretary, one deputy governor among others.

There is also a proposal of introducing a variable component to the salary of CEOs which will be linked to the performance of the individual banker.

Uniformity in the salary structure of PSU banks is leading to discontentment among bankers as there are hardly any incentive for performers.

Today's meeting was chaired by deputy governor K J Udeshi and attended by senior bankers including S S Kohli, CMD of Punjab National Bank.