Nayak panel stirs up a row - The Hindu

Nayak panel stirs up a row - The Hindu

Government interference
Government interference has adversely affected corporate governance in PSBs which face dual regulation, the RBI being the banks’ traditional regulator. They also face dual external oversight from the CBI and CVC.
Not many outside the public sector will realise as to how deleterious the impact of these organisations have been on their normal working. There are so many instances of fear psychosis holding back commercial decision making.
Government interference has meant that policy objectives rather than commercial considerations dictate a PSB’s working. A less charitable way of saying is that it is because of government pressure that several PSBs have lent to unbankable companies. Not all the worryingly high non-performing assets that banks are saddled with are due to government interference but if banks had decided on purely commercial considerations, they would most certainly had been better off.
Government control has also made the appointment of top bank executives opaque. Many of them owe their appointments to considerations other than merit. Once appointed as executive directors, managing directors and in other senior positions the time for a quid pro quo starts.
This is not to say that all PSB top managers are below par and do not deserve to be ......


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