In FY23, the State Bank of India (SBI) reported a 57.4 per cent jump in its net profit to Rs 55,684.17 crore. But the chairman of the country's largest bank, Dinesh Khara's annual pay for this creditable performance was just Rs 37 lakh (his peers at state-run banks are no better off). Look at his private bank rivals - most pocketed in excess of Rs 7 crore annually - plus stock options.
A top-class board is important from a systemic point of view, more so at a time when the wider financial world and India Inc is chasing the same talent as banks.
RBI says haste in easing norms for banks harmful to economy.
The talk of governance reforms at public-sector banks seems to remain on paper, as a majority of them continue to be working with just a handful board members. Half of the board seat at these banks have been vacant. Ten of the 12 public-sector banks, even large ones like Punjab National Bank, Canara Bank and Union Bank of India - all except State Bank of India (SBI) and Bank of Baroda - don't even have a chairman. In 2014, while splitting the post of chairman & managing director (CMD), the government had decided to appoint non-executive chairmen at these banks. SBI, which has an executive chairman and four managing directors, was an exception.
Merely bringing down the government stake below 51% may not find any taker for the PSBs. The government must bring down its holding to at least 26%, recommends Tamal Bandyopadhyay.
The government will not bring down its ownership in public banks.
Union Finance Minister Arun Jaitley is set to present the Budget next month.
RBI may revise remuneration for banks.
The most common complaint of financial consumers is cumbersome processes, complicated products, usurious charges, and mis-selling of products, which finally don't deliver what is promised or as expect, notes Debashis Basu.
'There is a law that prevents the government from diluting its equity in the PSBs below 50 per cent.' 'That law has to be amended and given the parliamentary arithmetic of the political parties, it is not as simple to do that.'
The government is considering a proposal to privatise some state-owned banks in phases.
India's ailing banks need immediate attention.
The comments come about a week after PSU bank employee unions went to a four-day relay strike to press for early revision of wages.
Banks will need more funds, as they have to provide more capital.
Public resources are scarce and need to be used well.
Economy improving but long way to full recovery, says FSDC.
A Bank Investment Company to act as a holding company for state-owned banks would go a long way in minimising government interference and improving governance.
A key hindrance to a faster turnaround of these banks is the slow progress in the resolution of legacy bad loans and the need to build up provisions against those assets.
India has a long way to go before it develops a culture of professional boards accountable to institutional investors. There is, therefore, no realistic alternative to reforming and strengthening PSBs under government ownership, says T T Ram Mohan.
The government must set up a Bank Investment Company to shrink its role in PSBs, if we are serious about tackling the two persistent issues - lax corporate governance practices and discretionary decision-making, says Shyamal Majumdar.
RBI data show one-fifth of all the infrastructure loans are stressed and the share of such loans in overall stressed assets is nearly a third.
The Governor, who completes one year in RBI on Wednesday, has stabilised the rupee and is getting a fix on inflation.
Bankers seem to be pleased with the government for keeping its promise of not interfering in operational matters, but are apprehensive about the intense scrutiny of their functioning.
Many bankers say the move will have a serious impact on the chain of command of nationalised banks and that it would only enable the government to dish out favours to a few of their own men.
The government's step to curtail fiscal deficit is helping the central bank's monetary policy, Rajan said.
Bankers said the mammoth task of cleaning up the PSBs and improving their health will be a mammoth task for any chief executive.
Advice to the new finance minister from former RBI governor Raghuram Rajan: 1. Clean up banks by reviving projects that can be revived after restructuring debt. 2. Improve governance and management at public sector banks. 3. De-risk banking by encouraging risk transfers to non-banks and the market. 4. Reduce the number and weight of government mandates for public sector banks, and for banks more generally.
While the US is definitely recovering, Europe, Japan and, now, China are all going through another wave of what some fear could be a multi-year slowdown.
The rally followed the govt's plan to bolster state-owned lenders.
The incidence of corruption cases can be checked to a large extent if the suggestions already available with RBI and the government are taken seriously, says Shyamal Majumdar.
The year 2014-15 could well go as one of long-pending financial sector reforms, expected to have a lasting impact.
Several brokerage houses have given a year-end target of as high as 30,000 for the BSE bourse's benchmark Sensex, with fund managers telling investors not to redeem though the index is still only around 25,000.
'Public sector banks are like an extended arm of the government.' 'They rush to rescue certain sectors or they rush to invest in certain sectors to prop up the economy which the private banks don't.'
Finance minister Arun Jaitley has delivered a Arun Jaitley delivered a bold, far sighted budget
Most expect the Budget to be path-breaking.
We still have time for this government to take action.
In an interview with Business Standard, Arundhati Bhattacharya says she expects stalled projects coming back on track in two quarters.
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