Govt will soon appoint heads of major PSU banks: Raghuram Rajan

By: | Updated: July 2, 2015 5:35 PM

Raghuram Rajan also said India's economy is in the process of a steady recovery, but added that the government needs to work on reforms to accelerate growth further.

Raghuram RajanRBI Governor Raghuram Rajan said that the government would soon appoint heads of PSU banks given the importance of acting quickly. (Express Photo)

The government will soon appoint new heads of major public sector banks, RBI Governor Raghuram Rajan said today.

“The government is seized of the issue — the need to move quickly on the appointment process… Now we are very close to the announcement, but the final word on that has to come from the government,” he told reporters after a meeting of the RBI board here.

The department of financial services had earlier sought applications for the post of MD and CEO in Punjab National Bank, Bank of Baroda, Bank of India, Canara Bank and IDBI Bank for a fixed term of three years.

A final decision will be taken by the Appointments Committee of the Cabinet (ACC), headed by Prime Minister Narendra Modi.

When asked whether the absence of full time PSU bank chiefs is leading to deterioration in performance of banks, Rajan said: “All bankers are coming to us and saying the sooner we put the heads in place, the better. I don’t know what the actual analysis would reveal. I think that if the heads are important there would be some deterioration, whether it is significant or not I do not know.”

In April, the department of financial services had relaxed the eligibility criteria for appointment of heads of public sector banks.

While the age limit was increased from 55 to 57 years, the mandatory board-level experience for the applicants was reduced to one year from three years to invite more experienced talent for heading large public sector banks.

In December, the government had appointed Managing Director and CEO in four state-owned banks — Indian Overseas Bank, Oriental Bank of Commerce, United Bank of India and Vijaya Bank. The MD and CEO of Syndicate Bank was appointed in May.

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