On one end, the regulator is nudging banks to function autonomously without being influenced much by its MD & CEO. It wants banks to have multiple layers of senior management taking the critical calls, so that power isn’t concentrated. In the last two years, some of the large banks have carved out positions like Deputy CEO, and have segmentalised businesses to create smaller units within the larger functions of retail and corporate loans. But there are still a few banks which the regulator feels are continuing to operate like ‘one-man’s show’.
The promoters of these banks, though their shareholding is very miniscule, are the one-point contact for all purposes and this is apparently leading to a lot of managerial risks. What’s more, MD & CEOs of these banks have done a little over half the permitted tenures and now they cannot duck the diktat from the top for long. Time and again, these banks have been told to broad-base the management bandwidth, but that’s not happening in the way the regulator wants. But they cannot buy more time. In the coming fiscal if this issue isn’t fixed people at the top aren’t going to find it easy.
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.