Tenure of PSB chiefs

This refers to the editorial ‘Seat of power’ (November 29), on the longer term of 10 years for managing directors and whole-time directors in public sector banks. While this may bring in accountability, as they will be able to preside over lending for at least an entire cycle, there are certain constraints that must be taken into account.

It is unlikely that the government will let off its hold by giving a straight five- or 10-year term. The appointment will continue to be for a period of three years extendable for a further period at the discretion of the government. So efforts to toe the government line when the term is nearing extension might be resorted by the person concerned, thereby jeopardising transparency and governance in business matters

Provisioning for staff pension and superannuation may be curtailed when faced with stressed assets and added provisioning.

The long tenure of MDs in some private banks reveal that boards, audit commitees and even risk officers, supposed to be independent, have succumbed to the power exercised by the MD and CEO. Precisely for this reason, the RBI reduced and capped the tenure of MDs/CEOs in private banks

The independence with which the selection of EDs/MDs is carried out by IBBI is a matter of debate. Initially, persons from outside PSBs were roped in. As much success could not be achieved, the selection is lateral now from among all PSBs. So, long tenure alone may not bring in the desired results. The selection process must demonstrate that meritocracy is given the weightage it deserves.

V Viswanathan

Coimbatore

Pension as deferred wage

This refers to ‘Losing proposition’ (November 30). The backdoor introduction of NPS in December 2003 (effective January 1, 2004) without deliberations in legislatures or any effort to take the affected employees into confidence are to be primarily blamed for many of the ills the present New Pension System is suffering from.

The abrupt and prospective discontinuance of the defined benefit pension scheme for Central Government employees (other than Defence personnel) was a hotchpotch ad-hoc measure to bypass the need to initiate action to create a pension fund.

The earlier the Central Government takes a realistic view and reviews the whole issue in a comprehensive manner, the better for the country.

MG Warrier

Mumbai

Rupee trade

The Ukraine stand off has accelerated India’s efforts to upgrade the image of the rupee, and make it acceptable in bilateral trade. For this arrangement to work well, the trade flows have to be reasonably balanced. As a sovereign guarantor, the government must try to maintain the value of the rupee through fiscal and CAD management, not to speak of ensuring a healthy and transparent stock market.

R Narayanan

Navi Mumbai

Digital rupee

This refers to ‘Four Banks, 4 cities: RBI to pilot retail digital rupee tomorrow’ (November 30). The move to having our own digital currency is welcome, as it will help reduce cash circulation in the economy. It is also good that the launch is being done in phases, as the preparedness of the IT and back-end teams of banks will get tested

But to make this initiative a success, an aggressive awareness campaign is needed by the government and all participating banks.

Bal Govind

Noida