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Govt announces revamp plan for PSBs

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arun-jaitleyHighlighting the action taken and to be taken to revamp the public sector banks (PSBs), Finance Minister Arun Jaitley said the Government has taken various new initiatives and policy decisions to revamp the sector.

Financial Services Secretary Hasmukh Aadhia also made a comprehensive and self-contained presentation highlighting the various policy initiatives taken by the Department in last one year and perspective decisions to be taken in near future to overall improve the performance of the PSBs.

Key details of the presentation made on the occasion is as follow:

Appointments:

The Government decided to separate the post of Chairman and Managing Director by prescribing that in the subsequent vacancies to be filled up the CEO will get the designation of MD & CEO and there would be another person who would be appointed as non-Executive Chairman of PSBs.  This approach is based on global best practices and as per the guidelines in the Companies Act to ensure appropriate checks and balances.  The selection process for both these positions has been transparent and meritocratic.

Recent appointments:

MD & CEOs

Name of the Bank Name Age Present Position
Bank of Baroda P S Jayakumar 53 yrs MD & CEO of VBHC Value Homes Pvt Ltd.
Bank of India M.O. Rego 56 yrs Deputy Managing Director, IDBI Bank
Canara Bank Rakesh Sharma 57 yrs MD & CEO, The Laxmi Vilas Bank Ltd
IDBI Bank Ltd Kishore Kharat Piraji 56 yrs Executive Director, Union Bank of India
Punjab National Bank Smt. Usha Ananthasubramanian 56 yrs CMD, Bhartiya Mahila Bank

 Non-Executive Chairman

Name of the Bank Name Age Present/Last Position held
Bank of Baroda Ravi Venkatesan 51 yrs Independent Director, Infosys
Bank of India G Padmananbhan 60 yrs Retired ED of Reserve Bank of India
Canara Bank T N Manoharan 59 yrs Director, Tech Mahindra, Public Health Foundation
Vijaya Bank G Narayanan 66 yrs Retired ED, Indian Overseas Bank
Indian Bank T C V Subramainian 66 yrs Retired CMD, Exim Bank

 Bank Board Bureau:

The Bank Board Bureau (BBB) will be a body of eminent professionals and officials, which will replace the Appointments Board for appointment of Whole-time Directors as well as non-Executive Chairman of PSBs.  They will also constantly engage with the Board of Directors of all the PSBs to formulate appropriate strategies for their growth and development

Capitalisation:

The proposes to make available Rs.70,000 crores out of budgetary allocations for four years as per the figures given below:

(i) Financial Year 2015 -16 Rs. 25,000 crore
(ii) Financial Year 2016-17 Rs. 25,000 crore
(iii) Financial Year 2017-18 Rs. 10,000 crore
(iv) Financial Year 2018-19 Rs. 10,000 crore
Total Rs. 70,000 crore

Improved valuations coupled with value unlocking from non-core assets as well as improvements in capital productivity, will enable PSBs to raise the remaining Rs. 1,10,000 crore from the market.  Moreover, the government is committed to making extra budgetary provisions in FY 18 and FY 19, to ensure that PSBs remain adequately capitalised to support economic growth.

In the Supplementary Demand recently passed by Parliament, an amount of Rs. 12,000 crore has been provided, in addition to Rs. 7,940 crore already provided in the budget of FY 2015-16.  The remaining Rs. 5, 000 crore would be provided in the second Supplementary later this year.

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