Centre To Retain Authority Over Appointment Of PSB Independent Directors

The central government is not in favour of allowing Public Sector Banks (PSBs) to appoint their own Independent Directors, according to a Business Standard report quoting an unnamed senior official.

The official said that retaining this authority is necessary to maintain oversight and ensure the effective rollout of financial inclusion programmes. Currently, Non-Board Directors in PSBs includes government-nominated Directors, the Reserve Bank of India (RBI)-nominated Directors, Independent Directors, and shareholder-elected Directors. During the ‘PSB Manthan’ earlier this month, experts and bankers had suggested that the power to appoint Independent Directors should rest with the Boards of PSBs to strengthen accountability. The government, however, maintained that such appointments remain its prerogative as the promoter.