PSU Banks

The Centre’s decision to alter the selection process of CMDs and EDs of public sector banks ,though welcome, may not address the core of the problem.Banks' primary business is in lending. And that needs informed discretion and application of independent judgment . This would call  for integrity ,both in its system and its managers. Over time, the government as owner of PSU banks, has managed to dilute both.It is not enough that these banks are given some degree of freedom in the selection of its CMD /ED. After all ,the top man can not be expected to single handedly counter the shortfalls in a strait jacketed system that  makes up  the entire public sector banking. or for that matter every PSU. One very significant area that has remained unaddressed ,is the employed manpower. This was needing to be optimised for a long while now,but attempts to do so were always cosmetic.A compact manning, besides sharply pulling up productivity would  enhance accountability, of paramount importance in financial dealings.One argument for excess manning is that PSU banks need greater penetration and reach, as part of the government's inclusive policies. But we now see that private banks too are rapidly opening  up  branches in rural locations.They carry with them advantages of both  a leaner staff and tested systems , inter alia , a nodal mode of sanctioning loans armed with pertinent endemic data and  client -base information.The branch manager is left to  largely deal with day to day operations and client servicing.  Basic changes in systems of bank operations with assisted oversight ,must be planned and implemented.There is little reason why PSU banks then can not match productivity and profits of those in  private sector.Parity in PSU bank salaries will then kick in ,as a matter of earned right . As it stands today,a pedigreed CMD  even if painstakingly selected , is no remedy by itself