Centre refills 4 PSB board seats with women directors

In a record of sorts, the central government has nominated four women directors of the seven new directors on the boards of seven state-owned banks.

Through a notification on July 14, the department of financial services has announced the appointments of Charulata Kar on the board of Central Bank of India in place of PJ Thomas, K Nikhila in place of Aditya Gaiha at Indian Bank, Sonali Sengupta in place of Vivek Agrawal at Indian Overseas Bank and Uma Sankar at Punjab National Bank in the place of Anil Kumar Misra. The other three directors -- Ashok Narain, Sanjeev Prakash and Prakash Baliarsingh – were nominated on the boards of Bank of India, Bank of Maharashtra and Union Bank of India. The outgoing directors of these three banks are Subrata Das, MK Verma and Arun Kumar Singh. The nomination of these directors has been carried out under the Banking Companies (Acquisition and Transfer of Undertakings) Act 1970.

The government is empowered under clause (c) of sub-section (3) of section 9 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, read with sub-paragraph (I) of paragraph 3 of the Nationalised Banks (Management and Miscellaneous Provisions) Scheme, 1970, to make the appointments on the recommendation of the Reserve Bank of India (RBI). Since the directors are mostly central bank officials with expertise in banking laws and supervision they are referred to as 'RBI directors.'

Incidentally, in 2019, the RBI had come out with guidelines on 'fit and proper' criteria of 'elected directors' and directed the banks to constitute a nomination and remuneration committee (NRC) comprising a minimum of three non-executive directors from the board of directors. These non-executive directors, which need to comprise an independent director and a member of the bank's risk management committee of the board, have tasked with the due diligence process to arrive at a 'fit and proper' status of the persons to be elected on to the board.

Post a consolidation spree, there are 12 public sector banks in the country with SBI emerging the largest bank with a balance sheet size of ₹59,544,183 lakh crore. There has been a conscious effort on the part of the government to increase the representation of women in executive positions at banks. In 2010, a committee headed by former Bank of Baroda chairman Anil Khandelwal, had mentioned that women, then, accounted for only 17% of employees in state-run banks, and with just 2.7% in executive positions. As of March 2023, Indian Overseas Bank had the highest share of women employees at 36%, followed by Canara Bank (31.6%) and Punjab & Sindh Bank at 30%.