Saturday, August 15, 2015

New experiment in public sector banks

GOI has come up with a new policy called 'Indradhanush' ('rainbow') with a 7-point agenda for public sector banks. One of the points is not to be inhibited by present practice of appointing only public sector bankers as chiefs of such banks.

Many wondered whether executives accustomed to sumptuous salaries would like to serve PSBs. At last, the government has succeeded in roping in P.S.Jayakumar to be MD and CEO of Bank of Baroda which is among the largest three banks in India. Ravi Venkatesan, former Chairman of Microsoft India will be the non-executive Chairman of Bank Of Baroda. This is quite an experiment, having both Chairman and MD from private sector.

Will the experiment succeed? Prakash Tandon who was the first Indian to head Hindustan Lever Ltd. became Chairman and Managing Director of Punjab National Bank in early seventies of the last century. He was not a banker otherwise.Though he tried to change the bank's bureaucratic culture, he was not a roaring success partly because the government control on the bank was tight and unrelenting. The government has now assured that it will not interfere in the functioning of PSBs.

P.S.Jayakumar is not new to banking. As a Citibanker, he was interestingly once the Head of Balance Sheet Optimisation in Asia-Pacific region of Citibank. Optimising the more intractable imponderables in public sector culture may be more difficult. At present, he is the MD of VBHC Value Homes. An M.Com. from University of Madras, he is also an MBA from XLRI, an ACA and an alumnus of London School of Economics.

Unlike Bank of Baroda, PNB, IDBI Bank and Bank of India will not have the benefit of fresh blood from private sector. The experiment in (or with?) Bank of Baroda will be keenly watched.

1 comment:

Anonymous said...

Bank of Baroda appointments really constitute a novel 'experiment'. Proposed Chairman and MD & CEO are among the youngest. Ravi Venkatesan is only 51 years old and Jayakumar 53. Their combined innovative ability and result-oriented dynamism should catapult BoB into one of the best banks.