The appointment of a third executive director (ED) in public sector banks, scheduled on April 1, has been delayed due to bureaucratic hurdle.
The government was expected to appoint additional EDs in six large public sector banks — Punjab National Bank, Bank of Baroda, Canara Bank, Bank of India, Union Bank of India and Central Bank of India — to begin with. Appointments for other banks were to follow: Smaller institutions such as Bank of Maharashtra and Dena Bank, which have one executive director, were to get a second.
As a result of retirement and expansion at the top, 24 vacancies for EDs would have been created in 2012-13. An appointment committee, headed by banking secretary D K Mittal, had interviewed 48 candidates in January.
The finance ministry had written to banks that the third ED should exclusively be for human resources and information technology. “The appointments are in the process of getting final clearance from the ministry. Some senior EDs are retiring in May, hence these positions will be filled up first,” said a senior official at a large state-run lender.
Meanwhile, the finance ministry has decided to take stock of the banks’ progress in implementing Khandelwal committee recommendations. In a recent letter, the ministry has asked banks to constitute the steering committee of the board on human resource (HR) and get the HR plan approved by March 31. It has asked the banks to provide a road map on how the recommendations are being implemented.
“We have sought time from the ministry till the end of May. After the financial results are out, banks will be starting the process,” said a top official at a mid-sized public sector banks.
As a part of the Khandelwal committee recommendations, the government had advised that each state-run lender form a steering committee of the board. The committee will consist the chairman and managing director, ED, government director and two HR professionals from outside the organisation concerned. This committee will look into critical issues in HR every quarter.
In order to promote higher and improved performance, the Khandelwal committee has recommended that lenders be required to introduce and implement a performance management system. Other recommendations include outsourcing of non-core activities in a time-bound manner and making variable pay a major component of wages.
