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Our Bureau

Mr P.S. Shenoy

Mumbai , Feb. 22

BANKERS have hailed the Government decision to grant managerial autonomy to the State-run banks.

"It was a pleasant surprise to see that the Government has taken the swiftest decision on banking issues yet, after the January 28 meeting the public sector bank chairmen had with the Ministry of Finance.

With this, the public sector banks will be able to manage competitive challenges, especially in the human resources area to make them fit enough to fight competition from private and foreign banks", said Mr P.S. Shenoy, Chairman and Managing Director, Bank of Baroda and Chairman, Indian Banks Association.

Mr A.K. Khandelwal

Agreeing with his views, Mr A.K. Khandelwal, Chairman and Managing Director, Dena Bank, said, that the measures were a positive development for the banking industry and wouold help banks restructure business strategies and recast human resources.

"More than anything, the Government is realising that there is no point in being involved in the day-to-day administrative affairs of banks, as is indicated from these measures.

The Government had two meetings with the bank CEOs in the past six months. "The measures announced are through the interactions between the management of banks and the Government and that helps", he said.

However, a section of bankers were cautiously optimistic in their reactions to the day's events. Their view is that although the Government is talking of loosening norms in the banking sector, the regulator is moving in the opposite direction in terms of tightening regulations.

"Although banks will not have to approach the Government, henceforth, on changing business models etc, they will still need regulatory approvals in most cases. It is up to the RBI now to reassess which are the areas where they can offer some more flexibility", said a senior banker with another leading public sector bank.

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