Prime Minister Modi to meet PSU bank chiefs; to discuss about CMD appointment issue

PM Narendra Modi

PRIME Minister Narendra Modi will meet chiefs of public-sector banks, says a media report. The proposed meeting comes close on the heels of rising bad loans and reports of various irregularities in state-owned banks. The prime minister...
is likely to take stock of the banks' performance - an exercise usually undertaken by the finance minister. Modi, who prefers to cut hierarchy and have direct discussion, will meet the bosses of PSU banks this month. The credit offtake fell to Rs 72,100 crore between April 1 and August 22 this year from Rs 2.35-lakh crore in the same period last year. The growth in credit since the start of the financial year slowed to 1.3 percent from 4.7 percent. While overall non-food credit grew a mere one per cent so far this year incrementally, credit to industry actually fell 0.6 percent since April.
The meeting will take place after the vacant posts of chairman and managing directors (CMDs) in public-sector banks in November.
The National Democratic Alliance government had recently scrapped the selection of six bank chiefs recommended by the previous United Progressive Alliance regime, after a high-level panel found irregularities in the process followed.
As the morale of some CMDs seems to be low after the change in the selection process, the Prime Minister is also likely to give a pep talk to the bankers just the way he gave to the bureaucrats in his two interactions with them since assuming office in May.
In the meeting with secretaries of the Central government last week, Modi had asked them to act fearlessly. The meeting came in the backdrop of sudden transfers of some high-profile officers to low-key ministries. Sources said it aimed at allaying fears in the minds of the officers.
Modi might also ask for a status report on his flagship financial inclusion programme, Pradhan Mantri Jan-Dhan Yojana, and discuss freely with banks the problems they are facing in rolling out the scheme.
G S Sandhu, secretary, Department of Financial Services will take a meeting bank CMDs on November 5 to take stock of the progress of the scheme.
Besides bank CMDs, it is also likely to be attended by insurance companies and the telecommunications department. Officials from the Unique Identification Authority of India will also be there to track seeding of Aadhaar with bank accounts.
The government earlier scrapped two panels of candidates for top jobs in public sector banks finalized towards the end of UPA regime.
The decision came amidst allegations of widespread irregularities. The government will launch a fresh exercise to appoint eight bank chiefs (nine candidates had been shortlisted, with one person earmarked against a future vacancy) and 14 executive directors.
A number of top public sector banks including Bank of Baroda and Canara Bank have been without a full-time chairman and managing director. Recently, Punjab National Bank also joined the list on with KR Kamath's term coming to an end.
The role of the public sector banks assumes significance with the recent announcement of Pradhan Mantra Dhan Jan Yojana (PMDJY). Launched on launched on August 28, the PMJDY is an ambitious scheme launched by Prime Minster Narendra Modi, under which the government will provide every household with a bank account and an insurance cover.