Public sector banks | The government is seeking measures to strengthen governance and HR practices in PSBs
New Delhi: The Narendra Modi government would consider measures to further strengthen corporate governance and human resource practices in nationalized banks through a diversified board structure, strengthening of board-level committees and a management system. robust performance for employees.
“The merger process is complete and it is now high time to reorganize corporate governance and human resource practices along the lines followed by banks such as the State Bank of India”, the Economic times cited an executive familiar with developments.
Some of the key proposals under consideration are extending the tenure of executive directors, hiring specialists in areas such as NPA management, and accelerated promotion for top performers.
“The idea is to further professionalize the boards of directors of PSBs and bring in experts in risk management, information technology and human resources management,” said the aforementioned leader, adding that after the merger, these banks are as big as the State Bank of India.
The government announced the merger of 10 public sector banks into four big ones in August 2019, reducing the number of PSBs in the country to 12 from 27.
Oriental Bank of Commerce and United Bank of India merged to form Punjab National Bank; Syndicate Bank merged with Canara Bank; Allahabad Bank with Indian Bank and Union Bank of India with Andhra Bank and Corporation Bank. The Punjab National Bank (PNB) is the second largest public sector bank after the merger.
The ET report mentioned that the Banks Board Bureau could resume these discussions to formulate a long-term strategy.
“It has been observed that if there is a need for specialists, high-level positions must also have experience of basic functions,” the financial daily said, citing another executive. He further added that there was a need to train people from the parent bank who could take on higher assignments later.
One of BBB’s main mandates is to help banks develop a strong leadership succession plan for critical positions and to advise the government on the evolution of appropriate training and development programs for senior staff.
“BBB will also maintain a database on the performance of PSB leaders. This will contain information regarding assignments, placements, promotions and senior management vigilance, ”added the executive.
Banks through Ease 4.0 can also address these issues at their board level. Launched in January 2018, Enhanced Access and Service Excellence (Ease) is the reform program common to all public sector banks aimed at institutionalizing a clean and smart bank.
“We suggested identifying the skills and carrying out a skills assessment of V and VI scale agents with significant seniority in the bank using tools and methodologies approved by the board of directors,” said the leader cited above in the publication.