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Merger of public sector banks: Has governance been given short shrift?

The govt's silence on the road map to change the governance structure of state-run banks make experts wary of the road ahead

illustration: Binay Sinha
illustration: Binay Sinha

The word “merger” was used only once in the recommendations by the committee headed by P J Nayak that reviewed the governance of boards of banks in 2014. Even former RBI Governor Y V Reddy has been categorical in his assessment on the impact of the move to merge 10 public sector banks (PSBs) into four, when he recently told a television channel: “Merger won’t solve governance issues.” The government while announcing the latest merger plans for PSBs did say the boards of banks shall get more freedom in the selection of independent directors and in ...