Bank of Maharashtra, UCO Bank Working without a Chairperson Since 2015: Govt

Moneylife Digital Team 26 July 2023

Economy & Nation

As many six public sector banks (PSBs) are working without a chairperson, the Lok Sabha was informed. Out of the six PSBs, Bank of Maharashtra and UCO Bank do not have a chairperson since April 2015.

In a written reply, Dr Bhagwat Karad, minister of state for finance, says, "The provision for separation of posts of chairman and managing director (MD) in PSBs and appointment of separate persons for these posts from the vacancy year 2014-15 onwards was made in April 2015. Subsequent to this, the non-executive chairman (NEC) has been appointed in nine out of 11 nationalised banks. It includes Bank of Baroda, Bank of India, Canara Bank, Central Bank of India, Indian Bank, Indian Overseas Bank, Punjab National Bank, Punjab & Sind Bank and Union Bank of India. At present, the position of NEC in Bank of India, Bank of Maharashtra, Central Bank of India, Indian Bank, Indian Overseas Bank and UCO Bank is vacant."

Karti P Chidambaram, a member of Parliament (MP), has asked for information about PSBs operating without a chairperson and if the absence of an NEC impacts the functioning and decision-making process of these PSBs.

Bank of Maharashtra and UCO Bank have been without a chairperson since 22 April 2015. Indian Bank has not had a chairperson since 14 August 2018, while the post has been vacant in Indian Overseas Bank and Bank of India since 16 February 2020 and 14 August 2020, respectively. The latest to join the list, Central Bank of India, is without a chairperson since 23 May 2021.

According to Dr Karad, NECs in PSBs preside over board meetings and board committees wherever they are appointed as chairpersons of such committees. "They do not participate in day-to-day business and in the management functions of the banks. As per the provision contained in paragraph l2(6) of the Nationatised Banks (Management and Miscellaneous Provisions) Scheme 1970 and 1980, in the absence of the chairman, the MD shall preside over the meeting of the board."

"Union government has constituted financial services institutions bureau (earlier known as Banks Board Bureau), which is mandated to recommend persons for appointment as NECs in PSBs," he added.

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