Govt panel moots Maharatna status for SBI
A government-appointed panel today called for according the coveted Maharatna status to the nation's largest lender State Bank,and Navaratna and Miniratna tags to other state-owned banks to foster competition.india Updated: Jun 30, 2010 19:38 IST
A government-appointed panel on Wednesday called for according the coveted Maharatna status to the nation's largest lender State Bank,and Navaratna and Miniratna tags to other state-owned banks to foster competition.
"We are suggesting SBI as Maharatna bank. Other banks be given Navaratna and Miniratna to foster competition. For that a study group should be constituted. Efficiency ratio to be a key criteria," former Bank of Baroda chairman A K Khandelwal, who headed the panel, told newsmen after submitting the report to Financial Services Secretary R Gopalan.
These tags give more autonomy to PSUs to decide on investment and other matters.
Maharatna PSUs can decide on its own investment up to Rs 5,000 crore in one project while Navratna can do so worth Rs 1,000 crore.
With banks vying to get these status, they will improve on their functioning and greater competition can be ecouraged.
Currently, the Department of Public Enterprises awards these status to state-run companies on the basis of their performance. But no banks have so far been given this tag.
As per the criteria for a Maharatna status, a PSU must have a Navratna status before which it must have been a Mininavratna. So if the criteria for banks are not changed, SBI could be given only a Miniratna status at first.
At present, only NTPC is given a Maharatna status. Though IOC, ONGC and SAIL also fill most of the criteria, they do not have the required number of independent directors on their board. While the Maharatna status for these three PSUs has been approved by the government, their nodal ministries will award it to them as soon as they meet this yardstick.
Coal India also fulfills most criteria for the Maharatna status, but it is not listed, one of such norms for this coveted tag. The company, which currently enjoys Navratna status, would be given the Maharatna tag the moment it is listed. The CIL public issue, likely to be up to Rs 12,000 crore, may hit the markets by October.
The Khandelwal panel, whose main terms of reference was to look into the HR issues of public sector banks, recommended autonomy for banks to have their own wage structure. It said employees stock options be given to 15 per cent top performers. As of now, there is no Esop among PSBs. The panel also suggested better remuneration for the CMDs of the PSBs.
That apart, it also recommended induction of specialists in HR division, besides appointment of executive director for this department, well-planned HR policies.
The panel recommended 50 per cent direct recruitment of officers, against 25 per cent at present and compulsory services of three years for rural service for new recruits.
The committee also proposed appraisal of chief manager and senior officers on the basis of feedback from colleagues, subordinates and customers.
First Published: Jun 30, 2010 19:36 IST