MUMBAI: The recent arrests of public sector bank chiefs has cast a shadow upon the banking sector, as senior executives are growing apprehensive if they too would end up at the receiving end a few years down the line. Sources said, though there are no signs of a challenge in filling up the vacancies yet, bankers are certainly giving a serious thought to the offers being put on the table.
"The recent arrests (of bank chiefs) have, I wouldn't say dampened, but had some effect on the bankers... It's unfortunate that some people were put to inconvenience but I'm sure most of them will come unscathed," V G Kannan, chief executive, Indian Banks' Association (IBA) told Express. He added that many bankers, however, will be willing to take up the challenge, with almost 95 per cent of the people called for, have made it to the interview.
"I don't see the reason why they should be averse," he said adding that IBA will soon be sending a memorandum to the Ministry of Finance asking them to set up a panel that investigating agencies can approach before initiating criminal proceedings against bankers. "Genuine business decisions of bank executives shouldn't be questioned and that's the protection we are asking," he explained.
Some of the recent arrests that spooked the banking community include Bank of Maharashtra's CEO Ravindra Marathe, Executive Director Rajendra K Gupta, and former CMD Sushil Muhnot. Its board also removed Marathe from all functional responsibilities. Most recently, the CBI named two former CMDs of Canara Bank namely AC Mahajan and S R Raman in its chargesheet related to a loan default case against Winsome Diamonds. Prior to that Allahabad Bank CEO Usha Ananthasubramanian too was drummed out of office after being named in the CBI chargesheet pertaining to the $2 billion fraud at PNB. In the past, former IDBI Bank chief Yogesh Aggarwal and deputy MD B K Batra and eight others were arrested in the Kingfisher loan default case.
"These actions will certainly dampen the spirits, but those with a clean track record have nothing to lose," said a senior banker, quickly adding that for senior-level positions the government is interviewing at least three candidates for every one position. "We have a huge talent pool and there won't be a crisis as such even if a select few are averse of climbing the ladder for fear of a witch-hunt."
Last month, the government set itself a 30-day deadline to fill up all senior executive positions at state-run banks, according to Piyush Goyal, interim finance minister. In fact, two weeks ago, the Banks Board Bureau (BBB) recommended 22 general managers from various banks for the executive director positions, while a final call will be taken by the government.
While some banks have vacant ED positions, others are expected to open up if the current EDs are promoted to MD & CEO posts.
Currently, four state-run lenders have vacant chairman-level positions, while at least another eight banks are expected to see executive positions opening up shortly. Banks who have had no CEOs include Andhra Bank, Dena Bank and Punjab and Sind Bank. Other banks like Canara Bank, Indian Bank, Syndicate Bank, Bank of Maharashtra and Uco Bank are likely to see executive positions opening up as respective tenures of CEOs end this year and next.
Besides CEOs, there are positions to be filled up for executive directors in at least a handful of banks and as per estimates the BBB is set to recommend over 30 senior more managerial positions by the end of this month.