Centre may empower Public Sector Banks to induct non-executive director
The Central Government is planning to implement some of the recommendations of the PJ Nayak committee. One among them is to allow Public Sector Banks (PSBs) to appoint Non-Official (executive) directors on their board. The purpose is to allow PSBs to have more say in the appointment of non-executive directors.
Last year, in August, Finance Ministry also emphasized the need to enhance the role of non-executive directors by allowing them to perform roles as presently undertaken by the independent Directors in the corporate sector.
Presently, PSBs do not have the freedom to appoint non-executive directors. The government searches and selects non-executive directors for PSBs without requiring any consent from the state owned banks. Hence, it is expected that this initiative from the Government will lead to a constructive change in board dynamics where the MD or the CEO can take advice from the board and benefit from them.
