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Can a matriculate be the director of a bank?
Prabhjot Singh
Tribune News Service

Chandigarh, March 26
Can a matriculate or a beneficiary of a settlement be made a director of the nationalised bank concerned?

Punjab & Sind Bank, which has shown a remarkable turnaround in the past two years, has not only a matriculate but also a beneficiary of a loan settlement and several politicians on its board of directors. Interestingly, none of the non-official members has any background in banking or finance.

The bank, which is now heading to reduce its non- performing assets (NPA) to 0.5 per cent, expects a profit of around Rs 200 crore. But can the bank sustain its recovery to fiscal health for a long time?

Officers and other employees suspect that if the present trend of politicisation of the board continues, this trail of recovery may end abruptly any moment now.

The conduct of certain directors has now prompted the All-India Punjab & Sind Bank Officers Federation to take up the matter with the top management of the bank besides the ministry, alleging that the conduct of certain directors was a hindrance in the revival of the bank.

If the guidelines and conventions of the ministry of finance are any indication, only graduates, preferably in economics or law or business management, should be considered for such appointments.

The reason for fixing the minimum qualifications, insiders in the banking industry say, is that every director of a nationalised bank is deemed to be a public servant. As such, his qualifications cannot be lower than those of a clerk in the bank.

A look at the board of Punjab & Sind Bank makes an interesting revelation. Major (Miss) Krishna Mohini, a Congress leader from Himachal Pradesh, is a postgraduate in Hindi. Umesh Kumar Sharma, a matriculate from Haryana, is also from the same party. The latest to join the board, K.K. Sharma of Ghaziabad, is also a member of the All-India Congress Committee. Harcharan Singh Josh, a member of the Minorities Commission, claims to be a confidant of Prime Minister Manmohan Singh. Another director of the bank is Kamal Mann, who is also an activist of the Haryana Mahila Congress and member of the AICC.

Harcharan Singh Josh is a beneficiary of settlement of loans.

None of these directors has any background in banking, economics, marketing or business management. If six of the 10 directors of a nationalised bank are from fields other than banking, its future is not difficult to imagine, allege members of the officers’ federation.

Interestingly, none of these six directors of the bank is from Punjab, the state from which the bank gets the maximum business.

Last year, when the ministry of finance appointed R.P. Singh, an IAS officer, the CMD of Punjab & Sind Bank, the bank was in a mess with its fiscal health getting worse day by day.

Now when the bank decided to reiterate its commitment to Punjab, the state of its origin, it has started encountering a new plethora of problems, allege some of its senior functionaries representing the officers’ federation.

Even the representative of the officers on the board of directors, A. S. Mann, reportedly sent a letter to the chairman-cum-managing director last week complaining against the behaviour of a director for using “derogatory” language at a board meeting when cases of one-time settlement came up for discussion.

Though the guidelines prohibit directors from interfering in the day-to-day functioning of the bank, certain directors plead cases of defaulters and beneficiaries, visit clients and submit reports.

The federation wants the appointment of directors to be reviewed and appointments made from among leaders of trade, industry and banking with qualifications in consonance with the prestigious position of director of the nationalised bank. Banks should not be treated as dumping grounds for political activists or loyalists with little knowledge of banking.

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