The Hindu Business Line : PSBs may be allowed to offer equity abroad — Move to ease norms for roadshows by top brass

AFTER the spate of domestic equity offerings by public sector banks that are lined up, it could soon be time for the state-owned banks to tap the overseas capital market with equity offers. At least, the Government is hinting so, by initiating moves in advance to ensure the success of such offers as and when they are made.

As a first step towards a smooth sailing for such overseas offerings, the Ministry of Finance is planning to unshackle the top brass of the state-owned banks to enable them to undertake foreign jaunts to lead the roadshows to sell the offers to global investors.

The plan envisages allowing the top two layers of the public sector banks (PSBs) — the Chairmen and Managing Director and Executive Directors — the freedom to go abroad to attend the roadshows without the need to take formal clearance from the Government. The move is part of the proposed enhanced managerial autonomy package being drafted for the PSBs by the Government.

"In an era of globalisation, it is important for top management of the PSBs to access the capital market abroad and to interact closely with the investing community. Hence, CMDs and EDs may be allowed to undertake foreign visits, as necessary, without Government approval," the Finance Ministry has proposed as part of the autonomy package.

However, though no formal clearance would be required if the package is cleared, as a matter of caution, the Ministry has proposed that the banks need to intimate the Government of the travel plans of the top officials before they go out of the country on their marketing trips. "The details of the visit and the exact number of days of absence shall be intimated to Government before departure," the Ministry has said.

The autonomy package, being drafted by the Ministry in consultant with the Reserve Bank of India, proposed to link the higher level of freedom to be accorded to the banks with the overall standards of corporate governance.

Among the other measures that is being contemplated to grant significant operational autonomy to the banks, the package is proposing to allow banks to take their own decisions on acquisitions, merger or closure of unviable branches, opening of overseas offices, and setting up of subsidiaries.

There would also be no outside interference on plans to exit any line of business.

Bank would also be allowed greater freedom on human resources issues, including powers to fix differential compensation packages for specialised staff.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Rupee tad higher; securities weak

TMB loan mela

PSBs may be allowed to offer equity abroad — Move to ease norms for roadshows by top brass

ABN-Amro Bank on expansion drive

Insurance awareness week

Bank of Baroda gets nod for public issue

Federal Bank moving nearer to second public issue this year