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Minister of State for Finance, Shri S. S. Palanimanickam affirmed in Rajya Sabha today that Public Sector Banks have been granted more managerial and operational autonomy and a package on this was announced on 22.02.2005. These autonomy measures inter alia include the following:
Pursue new lines of business as part of overall business strategy.
Make suitable acquisition of companies or businesses, close/merge unviable branches, open overseas offices, set up subsidiaries and exit a line of business.
Decide all Human Resource issues relating to the Bank, including staffing pattern, recruitment, placement, transfer, training, promotions, etc.
Prescribe standards for categorisation of branches, based on volume of business and other relevant factors.
Prescribe essential academic qualifications, minimum qualification standards and modalities of promotion/recruitment to various categories.
Undertake visits to foreign countries to interact with investors, depositors and other stakeholders.
Lay down policy of accountability and responsibility of Bank officials and take action against erring bank officials in conformity with such policy. The policy framework should provide for stringent punishment for all malafide actions but, at the same time, recognize that bona fide errors do occur while making decisions relating to commercial judgement.
It would allow Public Sector Banks to hire talent from the universities and business schools directly without seeking Government approval. Banks have been granted autonomy to decide remuneration to officers and staff to attract best talent for their organisations. This information was given in reply to a question raised by Shri C. Ramachandraiah.
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