FinMin mulls splitting CMD post in PSU banks

The Finance Ministry said on Monday it is considering bifurcation of the post of Chairman and Managing Director in public sector banks to strengthen corporate governance following recent corruption cases.

"We are considering the proposal (to split CMD's post)," Financial Services Secretary G S Sandhu said.
Last week, Finance Minister Arun Jaitley had said the government is taking steps to help the management strengthen the risk management system in public sector banks.

Earlier, bifurcation of the CMD's post was also suggested by Reserve Bank. RBI had contented that CMDs of public sector banks enjoy absolute power along with boards.

It had also said CMDs often dominate the board during their tenure and therefore it also recommended that the post of CMDs be separated to empower the board.

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