Narendra Modi govt signals private-sector bosses could run PSU banks

By: | Published: February 26, 2015 8:39 PM

PM Narendra Modi government, which is seeking new chief executives for five state-run banks that are currently without a permanent leader...

Narendra Modi, Narendra Modi govt, narendra modi private sector banks, public sector banks, private sector banksThe government, which is trying to reform the country’s banking sector, said on Thursday both public- and private-sector candidates could apply to run Bank of Baroda, Bank of India, Punjab National Bank, Canara Bank and IDBI Bank. PTI

PM Narendra Modi government, which is seeking new chief executives for five state-run banks that are currently without a permanent leader or have a departing boss, has for the first time appealed for private-sector applicants to step forward.

The government, which is trying to reform the country’s banking sector, said on Thursday both public- and private-sector candidates could apply to run Bank of Baroda, Bank of India, Punjab National Bank, Canara Bank  and IDBI Bank.

India usually picks bank bosses from the ranks of state-owned lenders, which dominate the sector with an over 70 percent share of the country’s banking assets. They have, however, lagged private-sector rivals in profitability and amassed bad loans at a faster pace.

The candidates need to have 15 years of mainstream banking experience with at least three years in board-level roles. The salary package will be “flexible”, the government said.

But bankers say remuneration is the biggest hurdle for the government to attract private-sector talent as it is often a fraction of what top executives in private banks earn.

In December, the government said it would separate the role of chairman and chief executive in state-run lenders. It also plans to install non-executive chairmen to beef up governance.

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