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2 private sector banking professionals to head PSU banks

17Aug20151The government has appointed two private banking executives as heads of public sector banks. This is for the first time that such appointments have been made. P.S. Jayakumar, who is MD and CEO of VBHC Value Homes, becomes the MD and CEO of Bank of Baroda, while Rakesh Sharma, currently heading Lakshmi Vilas Bank, is tipped to take over as MD and CEO of Canara Bank. The government has also appointed new heads for three other public sector banks. They are currently serving as senior officers in various public sector banks. They are M.O. Rego, currently DMD at IDBI Bank, as MD and CEO of Bank of India, Kishor Kharat, ED at Union Bank of India, as MD and CEO of IDBI Bank and Usha Ananthasubramanian, currently CMD of Bharatiya Mahila Bank, as MD and CEO of Punjab National Bank. Announcing these appointments, Hasmukh Adhia, secretary, Financial Services, said in addition to these appointments, the government has also decided to nominate private sector professionals as non-executive chairmen of some public sector banks. Accordingly, Ravi Venkatesan, former chairman of Microsoft India and a board member of Infosys now, will be chairman of Bank of Baroda, while T.N. Manoharan, director, TechMahindra Public Health Foundation, will be chairman of Canara Bank, G. Narayanan, retired ED at Indian Overseas Bank, chairman of Vijaya Bank, T.C.V. Subramanaian, retired CMD of Exim Bank, chairman of Indian Bank, and G. Padmanabhan, retired ED of the Reserve Bank of India, chairman of IDBI Bank. The appointment of private sector bank executives in public sector banks is part of the government’s 7-point agenda aimed to revitalize these banks.

The government hopes these changes can help the banks to improve governance and boost earnings, important measures as they prepare to tap the markets for capital to strengthen their balance sheets. Previously, the heads of public sector banks were always selected from this sector. Adhia said in addition to these appointments, the government is also considering allowing public sector banks to hire mid-level executives from outside the state banking sector. The government also announced a plan, ‘Indradhanush’, outlining the structure of a seven-member Bank Board Bureau that will oversee in future the appointments process at public sector banks and provide advisory services. This could be a precursor to setting up a bank holding company that will be the repository of government stakes in state-run banks.

Meanwhile, the government has said there would not be any more hiring from private sector banks for positions of MD&CEO of public sector banks. Adhia said in future such positions will be filled up by candidates from public sector banks only – a pool of senior EDs.

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