Three managing directors (MDs) and ten executive directors (EDs) of public-sector banks have had their terms extended by the government, ensuring consistency in policymaking at multiple lenders at a time when the economy requires a big credit push to reverse a Covid-induced fall in GDP.
The Appointments Committee of the Cabinet (ACC) has approved a four-and-a-half-month extension of S.S. Mallikarjuna Rao's tenure as MD & CEO of Punjab National Bank until 31 January 2022, when he is slated to retire. Atul Kumar Goel, MD & CEO of UCO Bank, and A.S. Rajeev, MD & CEO of Bank of Maharashtra, both had their terms extended by two years.
During the pandemic, the Department of Financial Services suggested that top executives of PSBs have their contracts extended.
The ACC has also granted a two-year extension of the tenure of three executive directors, according to an order from the Department of Personnel and Training. Ajay K. Khurana (Bank of Baroda), A. Manimekhalai (Canara Bank), and P.R. Rajagopal are the three individuals (Bank of India).
Executive directors Sanjay Kumar and Vijay Dube (Punjab National Bank), Gopal Singh Gusain and Manas Ranjan Biswal (Union Bank of India), Vikramaditya Singh Khichi (Bank of Baroda), Shenoy Vishwanath Vittal (Indian Bank), and Alok Srivastava (Central Bank of India) have all had their terms extended until they reach retirement age.
The announcement came a day after Finance Minister Nirmala Sitharaman said state-owned banks would launch a nationwide loan outreach initiative in October, despite fears that bankers have become risk-averse. Credit flow has remained sluggish in recent months, continuing to be one of the policymakers' biggest headaches. Non-food bank credit grew at a slower rate of 5.9% in June, down from 6% a year earlier. In fact, after a 2.2 percent increase a year ago, loans to industry shrank by 0.3 percent in June. Despite the fact that liquidity has been in abundance since June of this year.
According to CARE Ratings, the daily surplus liquidity in the banking system averaged Rs 6 lakh crore in July and August.