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<b>Letters:</b> Decision-making in PSBs

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Business Standard New Delhi
This refers to the report "FinMin might split CMD post in govt-run banks" (July 16). The government appears to be counting too much on the proposed reforms of splitting the posts of chairman & managing director (CMD) and managing director (MD), and introducing a fixed tenure for CMDs and new criteria for appointing bank directors to improve the performance of public sector banks (PSBs). While these structural changes are welcome, as the P J Nayak Committee pointed out, the rot lies in the weak processes followed at the board-level deliberations and decision-making. The agenda papers and proposal notes put up to the board leave much to be desired and hide more than what is disclosed. Different directors playing to their constituencies do not take the management to task for shoddy performance. Thus, the government needs to simultaneously bring in systems and procedures for evaluations of the board proceedings by an independent apex banking body along with these proposed reforms.

Y P Issar Karnal
 
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First Published: Jul 16 2014 | 9:03 PM IST

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