The Union Government replaced two high-profile public sector bank chiefs in a first of its kind move, in addition to appointing five new MDs and chief executives at state-run banks struggling with stressed loans. The appointment came shortly after an ordinance was signed by President Pranab Mukherjee that empowered the Reserve Bank of India to order action against loan defaulters apart from getting lenders to initiate insolvency and bankruptcy proceedings.
The government moved Punjab National Bank managing director and CEO Usha Ananthasubramanian to Allahabad Bank, and Bank of India's Melvyn Rego to Syndicate Bank. “Some of the bank chiefs have not been doing enough. They just sit idle for two-three years and refuse to take any decisions, letting banks suffer,” a financial ministry official said. Announcing details of the ordinance, Finance Minister Arun Jaitley said the government was not satisfied with the way the public sector banks were operating.
“The object of this act is that the present status quo cannot continue. And the present status quo is that not much was moving and, therefore, a paralysis in the name of autonomy is detrimental to the economy itself and, therefore, that really requires to be broken.” he said in a media brief. Soon, an official notification was released stating that Corporation Bank executive director Sunil Mehta will replace Ananthasubramanian as PNB chief, while Canara Bank ED Dinabandhu Mohapatra will move to Bank of India in place of Rego. Indian Overseas Bank's ED R Subramania Kumar is made MD and CEO, and Oriental Bank of Commerce ED Rajkiran Rai G will move to Union Bank as MD.
Earlier, top designations in banks were given to experienced bankers who were “promoted” from smaller entities.
