In the wake of rising frauds and corporate governance issues in public sector banks, the central bank has recommended to the government certain norms for reforming public sector banks (PSBs).
“Based on various committees, including the P. J. Nayak Committee recommendations, we have made certain suggestions to the government such as segregation of the chairman and managing director posts and a separate committee for appointment of directors on the board of PSU banks,” said R. Gandhi, Deputy Governor, Reserve Bank of India (RBI), on the sidelines of the banking conclave organised by FICCI and the Indian Banks’ Association (IBA), here on Tuesday.
On recent reports about the government looking to pare its stake in public sector banks below 51 per cent following recommendations of the P. J. Nayak Committee (to review governance of boards of banks in India), Mr. Gandhi said the government had to take a view on how much they wanted to invest in these banks.
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He also said that final guidelines for giving universal banking licences on-tap would be issued in the current financial year. “We are working towards issuing guidelines for full-service banks on-tap. I cannot give you a timeline, but it will be in this financial year,” said Mr. Gandhi. Earlier, the RBI had issued draft guidelines for payment and small banks and is in the process of finalising the norms for the same.
“Now the public comments (on small and payment banks) have been received and we are factoring them in. Soon we will come out with final guidelines on these two,” Mr. Gandhi added.
On the liquidity coverage ratio norms, he said banks as of now were in compliance with the norms and would be able to achieve the target.
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