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CMD position may be bifurcated

The finance ministry is considering having separate positions of chairman and managing director for public sector banks. This, the ministry feels, will strengthen corporate governance in the banks. Financial services secretary G.S. Sandhu said the proposal is under consideration of the ministry. The move comes in the wake of the recent arrest of S.K. Jain, CMD, Syndicate Bank in a bribery case and the alleged misappropriation of funds to the tune of Rs 436 crore by two officials of Oriental Bank of Commerce and Dena Bank. The Reserve Bank of India had earlier mooted the suggestion of bifurcating the position of CMD. RBI had contented that CMDs of public sector banks enjoy absolute power along with boards and they tend to dominate the board during their tenure. All the public sector banks, except State Bank of India have CMDs, while in SBI there is a chairperson and four MDs.

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