As another season of annual general meetings (AGMs) of shareholders plays itself out, one is filled with a sense of déjà vu with respect to listed public sector banks (PSBs) — neither the government director nor the RBI director on the board of State-owned banks cares to attend the AGMs. It is left to the chairman and managing director (if there is one) or the managing director and CEO of the bank concerned to field inconvenient questions of the minority shareholders.

The main shareholder — read the Government of India — is not keen to face the hard questions.

There have been instances of the RBI and government nominees attending Board meeting preceding or succeeding the AGM, but not the AGM itself. While the RBI nominees cite internal diktats for not attending, the GoI ones just do not seem to be interested.

So much for governance in PSBs. Good governance is built on accountability, which in turn calls for ‘ownership’ of decisions made or proposed to be made. The hapless Chair at these meetings, many a time new to the PSB, is often subjected to a virtual bombardment by shareholders, particularly when dividend is either cut or no dividend is proposed.

While SEBI has taken a ‘sectoral’ approach (whatever that means) in not regulating the board composition of listed PSBs, one wonders why it remains oblivious to how AGMs in PSBs are conducted.

PSBs could be made exempt from the rigours of listing through a Presidential order, so that even if their shares are traded, bought and sold or become targets for disinvestment via offers for sale, they will remain immune to the requirements of listing.

This would be better than subjecting these sovereign entities to sham compliance, all in the name of corporate governance. It’s not surprising that George Orwell, who wrote that “All animals are equal but some animals are more equal than others”, was born in India!

Deputy Editor

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