The Hindu Business Line : Ministry may tweak branch norm on EDs appointment

New Delhi June 7 The Finance Ministry plans to take a re-look at the criteria for appointment of additional executive directors (EDs) in public sector banks (PSBs), especially from the viewpoint of the number of branches.

Currently, the additional ED appointment is determined on the parameters of business turnover and number of branches.

For the recent round of additional ED appointments, the Finance Ministry went by the parameter of Rs 1,00,000 crore of business turnover and branch network of around 2,000 as on the balance sheet date of March 31, 2006.

Biz turnover

There are a few mid-sized PSBs such as Indian Overseas Bank (IOB) and Oriental Bank of Commerce (OBC) which have achieved and surpassed the Rs 1,00,000 crore-business turnover mark, but are not making the grade in terms of number of branches. While IOB has about 1,700 branches, OBC has little more than 1,200 branches.

With the balance sheets of PSBs as on March 31, 2007 now trickling in, the Finance Ministry sees this as an opportunity to review the criteria especially from the standpoint of the number of branches.

Decision soon

"There are no plans to tinker with the Rs 1,00,000 crore norm, but we will certainly re-examine the parameter on the number of branches. A final decision is likely by the end of this month," a senior Finance Ministry official said.

The Government on Wednesday appointed an additional ED in six PSBs to strengthen their top management. These appointments were made on the basis of the balance sheets as on March 31, 2006.

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Ministry may tweak branch norm on EDs appointment