The phrase “familiarity breeds contempt” may generally be true. However, the tale is different in the banking world where familiarity may at times end up breeding “dubious intent” instead of contempt. This can impose a huge cost on the nation as in the wake of recent spate of scams that have rocked the public sector banks as well as violated the Reserve Bank of India (RBI) norms.
The current CEOs at the ICICI and Axis Banks have been around for too long. These banks are listed entities with exposure to public investments. While operational risks arising out of non-rotation of staff have been highlighted by the RBI post the Punjab National Bank scam, the corporate governance failure risks associated with extreme long tenured bank CEOs seem to have been ignored. This could be catastrophic. Such entrenched CEOs by gaining a status of invincibility may throttle career progression, stifle new ideas and fresh thinking and indulge in turf protection. This may as well lead to a classic case of an HR disaster with a culture swell of sycophancy/cronyism.
In this context, we need to draw from the standards set by Infosys. This is one company which taught the corporate top managers how to rise and recede gracefully. The RBI initiative in this regard is laudable indeed.
G Venkataraman, New Delhi
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