Corporate Gov- PSU Banks

Need experts, get political directors off my back: PSU bank chief goes public

Sandeep Singh
Posted online: Tuesday, June 26, 2007

New Delhi, June 25: In perhaps the first such case, the chairman and managing director of a PSU bank has gone public to protest the presence of directors appointed to his board at the behest of the ruling party.

“I have requested the government to reconstitute the board and I welcome people who have integrity and who can contribute...Banking is a highly complicated sector and we are custodians of depositors,” he said. “The bank board should be professionally represented so that it can contribute meaningfully,” said R P Singh, CMD of Punjab and Sind Bank, at a press conference today.
Last month, The Sunday Express had reported how the UPA government had crammed at least 32 of the 37 positions for independent directors (called in bank parlance, “non-official” directors) with men and women known for their allegiance to the Congress party.
Surprisingly, Singh is getting support from the highest quarters. Sources said he got the Finance Ministry’s OK to hold the press conference and moves are on to sack at least two of the five independent directors.
According to Singh, as the bank tried to reduce its non performing assets (NPAs) — from 17% two years ago to 2.4% today — defaulters felt the “pinch” of the recovery initiative and some of them “have been approaching the non-official directors for gaining concessions in settlements.” Since the bank refused relief, these directors “have launched a false propaganda against” the bank’s management, he said.
When the bank would go for auctions to sell distressed assets like properties, “we were put under pressure by these directors along with other political pressures from the sides,” said Singh. “We were told not to go for sale and take the settlement route,” he said. This route yields less money than an auction route.
The bank directors include Krishna Mohini, former Congress MLA from Solan, Himachal Pradesh and vice-president in the All India Mahila Congress; Harcharan Singh Josh, former secretary of the AICC minority cell; Umesh Kumar Sharma, former general secretary of the Haryana Pradesh Youth Congress and K K Sharma, former AICC Secretary.
In their complaint to the PM on May 25, these directors appreciated the Congress “tradition” of appointing party loyalists on PSU bank boards.

http://www.indianexpress.com/story/202685.html