S.S. Mundra, deputy governor of the Reserve Bank of India, has made certain drastic suggestions for the revamp of the public sector banks in the country. In an address at the Banking Reforms Conclave 2016 organized by Governance Now in Mumbai, he said dilution of the government stake below 50% and extending the tenure of CEOs to five years in the public sector banks to five years are necessary to make these banks viable and bring down the deterioration in the asset quality of the banking sector. Mundra also highlighted the bad loan problem in the public sector banks and said in the absence of strong structural and governance reforms, the consistency in performance would remain susceptible. He said the immediate road map should be towards complete managerial autonomy. If the government remains the largest shareholder, not necessarily a majority shareholder, it still serves the intended purpose, he added.
