Unions Set To Lose Bank Board Seats

The government is planning to overhaul the board of directors of public sector banks to restrict membership to government nominees and shareholder-representatives from the public. The move would keep away trade union representatives from directly occupying positions on the boards.

The proposal is likely to come up before the Cabinet in the next few weeks. The move may evoke stiff resistance from the unions.

In the run-up to the board revamp, the government last month dropped all non-official directors from the boards of all public sector banks and set a three-year tenure for them.

The composition of public sector bank boards has changed gradually over the past year, with the government giving permission for induction of a greater number of shareholder-representatives.

 

Corporation Bank was the first to induct public representatives on its board, followed by Oriental Bank of Commerce, Bank of India and Bank of Baroda. Dena Bank was the last one to induct shareholder-representatives through a secret ballot, and selected four that included former Uco Bank director S Ravi, Avinash Dalal and Subhas Chandra Wadhwa. Several other banks are planning to go public as well such as Allahabad Bank and Punjab & Sind Bank. Syndicate Bank made its maiden public offer late last year. Sources said the move to revamp the banks' boards and also their organisational structure is part of a bigger plan of a effecting a major structural change in the PSU banking fraternity, that includes divestment of government stake below 51 per cent.