The Banks Board Bureau (BBB), the apex body for selection of whole-time directors of state-owned lenders, has identified 75 senior management personnel of public sector lenders to take over leadership role in the future. From a pool of 450 senior management personnel across nationalised banks, an inaugural batch of around 75 personnel has been identified this year to help nationalised banks take on the current and emerging challenges as well as help create a leadership pipeline, BBB said in its activity report for the October 2018-March 2019 period.
“They are presently undergoing deeper assessments after which individual development plans will be generated. Shortly, a globally ranked Indian institution will be identified where every year the identified personnel will undergo intensive leadership development journey,” it said. It has made a case for giving a complete autonomy to banks to decide organisational structure for better efficiency.
BBB, headed by former Department of Personnel and Training secretary B P Sharma, also suggested revamping credit governance architecture in nationalised banks to reinforce efforts to minimise credit costs and enhance efficiency of credit allocation. “Incentivise maximisation of risk-adjusted income and disincentivise operational inefficiencies by aligning compensation with right performance metrics through the introduction of performance-based compensation through Employee Stock Option Scheme, which is different from Employee Share Purchase Scheme, and Performance Linked Incentives,” the report said.
It further said the Bureau was assigned with the task of recommending personnel for appointment as directors in government-owned insurance companies. In this regard, on January 4 this year, it made its recommendations for appointment of chairman and managing directors of LIC. Prime Minister Narendra Modi in 2016 approved the constitution of the BBB as a body of eminent professionals and officials to make recommendations for appointment of whole-time directors as well as non-executive chairmen of PSBs.
It was also given the task of engaging with the board of directors of all the public sector banks to formulate appropriate strategies for their growth and development. Besides, it was also asked to frame strategy discussion on consolidation based on the requirement. The government wanted to encourage bank boards to restructure their business strategy and also suggest way forward for their consolidation and merger with other banks.