New Chairpersons appointed for three PSU banks

The Narendra Modi government today appointed non-executive chairpersons for three state-run banks.

Charan Singh, the RBI chair professor at the Indian Institute of Management, Bangalore, has been appointed as the non-executive chairman of Punjab & Sind Bank, Financial Services Secretary Rajiv Kumar tweeted.

Anjali Bansal, the former managing director of TPG Private Equity, has been appointed at Dena Bank, while Tapan Ray, the former corporate affairs secretary, will take charge at Central Bank of India. The three appointees will be part-time non-official directors on the boards of the three public sector banks.

The appointments have been made based on the suggestions of Banks Board Bureau headed by Bhanu Pratap Sharma, Kumar tweeted.

The government has been experimenting with appointing experts from a variety of fields as chairpersons of public sector banks. In 2015, Ravi Venkatesan had been appointed as the non-executive chairperson of Bank of Baroda. In the same year, G Padmanabhan, former executive director of the RBI had been appointed as chairperson of Bank of India.

This is a move towards separating the responsibility between chairman and managing directors for better functioning of public sector banks, Kumar said while announcing the fresh appointments on Thursday.

Each of the three banks where new chairpersons have been appointed are grappling with stress.

Dena Bank, for instance, was recently told to stop fresh lending by the RBI. The bank reported a gross non performing assets ratio of 22 percent as of March 2018. Central Bank of India, too, had a bad loan ratio close to that of 21 percent. Punjab and Sind Bank is in a marginally better position with a bad loan ratio of 11 percent.