India’s state-owned bank chief executive officers (CEOs) and executive directors can now spend up to 50 days in foreign locations to explore new markets, meet foreign investors, correspondent banks, or get a first-hand experience of best practices of other banks.
Under existing norms, the CEO of a state-owned bank that has branches overseas was allowed to spend only up to 20 days abroad in a year, and CEOs of banks that don’t have overseas operations, can go for 10 days.
In case CEOs and EDs need to spend more days, they needed to take approval from the finance ministry.
“The finance ministry has decided to relax the travel norms for bank chiefs keeping in mind the growing demand and necessity for senior bankers to travel outside the country for business development,” a government official told HT on the condition of anonymity.
The government wants public sector banks to adopt the best global practices and also tap overseas markets for growth and expanding their networks.
Global ratings agency Moody’s recently downgraded the credit rating of India’s largest bank State Bank of India (SBI) and other banks. While it has evoked strong reactions from the government, it has also served as a wake up call.
“The government wants public sector banks’ management to acquire the best technical knowhow and also map their footprints abroad,” he said.
The restriction on travel for bank chairmen had proved to be a deterrent for state-owned banks especially SBI, Bank of Baroda and PNB, which have sizeable offshore businesses.
The finance ministry will shortly move the Cabinet for a Rs 4,50,000-crore cash infusion programme to bolster the capital base of public sector banks spread over a 10-year period.