Source: Business Standard, Jan 19, 2018
New Delhi: The government is planning to refresh the corporate governance norms for state-owned banks. The changed rules could be announced even before the Union Budget is presented, it is learnt.Improving the quality of credit appraisal at these banks is among the likely changes. The governance reforms, as an official put it, would bring in measures to track the performance of the executive-rank employees of the banks, intensively. The proposed steps would also respond to Moody’s criticism that reforms needed for efficiency and better operating performance were absent at public sector banks. Without such reforms, ‘’the sector would continue to represent a contingent liability to the sovereign’’, the second largest rating agency in the world had said last November. “From now instead of a hands-off approach, we intend to be hands-on,” said another officer, aware of the developments. According to him, other than wilful negligence, neglect of human resources had brought the state-run banks to their present state, especially in credit appraisal.