Attractive compensation package to recruit best professionals for PSBs on anvil, says Vinod Rai

New Delhi [India], Jan 5 (ANI): The Banks Board Bureau is working on a fairly attractive compensation package including elements of bonus, employee stock ownership plans (ESOPs), non-monetary perks and others at all management levels as part of corrective steps to ensure that best of professionals are recruited for public sector banks (PSBs), its chairman, Vinod Rai said at an ASSOCHAM event held in New Delhi today. "In some ways the compensation package of these public sector institutions needs to be improved, maybe we are not able to do much with fixed part of compensation package but variable part we certainly are looking into it and we are hopeful that by next financial year we will be able to introduce a far more attractive package," informed Rai while delivering 97th ASSOCHAM Foundation Day Lecture. "An attempt will be made to introduce accountability in the system, to ensure that you appoint a whole time director or a CEO (chief executive officer) at an age where he has got a minimum of six years more to go in the institution so that he can be held accountable for the decision," added Rai. He also said that the Banks Board Bureau is in the process of filling up vacancies. "We are looking for the right people, and we are trying to ensure that we choose the best and not the second-best." Rai further said, "We are in the business of trying to collate people who are from different walks of life and who will be willing to join boards of PSBs and be able to provide that kind of expertise which these banks have not had in the past and the effort is to ensure that it is these boards which run the banks." He said that all these activities are being carried out to establish a system and structure sans unhealthy practices that led to huge stress in the banking sector. Rai said that though the Corporate Debt Restructuring Cell was created with very noble intentions in early 2000s but later it found itself sagging with humongous amount of stressed assets in which there was no way it could manage those resources. He said that there have been innumerable cases where project reports were inflated, balance sheets manipulated and submitted, funds siphoned off and others. While on the other hand there are an equal number of instances where irresponsible or lazy lending took place, due diligence was given the go by and where supervision was callous. "In the Banks Bureau we are engaged in the task of trying to ensure that going forward, these things do not repeat themselves, a project report needs to be scrutinized very effectively, maybe we were lacking in experience in the banks which scrutinized or appraised these project reports, these have to be done by one or may be two independent agencies not having anything in common with each other," he said. Sharing his perspective on the most recent demonetisation move of the Union Government, he said that there is no harm in trying to cleanse the system and there are various ways to do it and demonetisation was one very effective way. "Any attempt to cleanse the economy is a very noble attempt and we should lend our energies in ensuring that process of cleansing takes place," said Rai. "It is far too early for us to say it is a success or not a success," he added. He also said that over the period of time banks may go in for mergers, consolidation and lots of thinking was going into the entire process. "The entire process is being thought of, it is not going to materialize in two or three months, it is a long drawn process, there is a lot of work which has to be done and once the roadmap is ready and hopefully in the next two to three years it will be rolled out," said Rai. (ANI)