Government appoints new Head for Bank of Baroda, Canara Bank

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The government named private sector professionals to run two of the country's biggest state-owned banks, the first time it has done so, hoping to bring more dynamism to lenders struggling under rising nonperforming loans. 

The government has appointed CEOs and non executive chairmen at five state-run banks. It had earlier split the post of MD and chairman and decided to hire bankers from the private sector in order to choose from a wider talent pool and help bring a more business-like rigour to the lenders. 

Rakesh Sharma, who currently heads private sector Laxmi Vilas Bank, will take over as the chief executive of Canara Bank while PS Jayakumar of VBHC Value Homes will head of Bank of Baroda. 

Ravi Venkatesan, an independent director on the board of Infosys and former chairman of Microsoft India, has been appointed non-executive chairman of Bank of Baroda. TN Manoharan, a director at Tech Mahindra and the Public Health Foundation of India, will be non-executive chairman of Canara Bank. 

Three-stage screening was done for the MD position culminating into final interview by three different panels," the finance ministry said in a statement. 

MO Rego, currently deputy managing director of IDBI Bank, will head Bank of India while Kishore Kharat Piraji will move to IDBI Bank from Union Bank of India, where he is executive director. 

The CMD of Bhartiya Mahila Bank, Usha Ananthasubramanian, will move to Punjab National Bank as MD and CEO. The finance ministry said there were some vacancies of non-official directors that will be filled over the next three months. 

"The selection of non-executive chairman in the remaining six PSBs (public sector banks) will also be completed in the next three months. Also, the appointment of MD and CEO in two other banks will also be done as early as possible," the ministry said. 

Dena Bank chairman and managing director Ashwani Kumar said: "The government is trying to improve the corporate governance structure of public sector banks, a step which is going to boost banks' operation in the long run. At the same time, the capital infusion plan is aimed at strengthening banks' balance sheet." 

CARE Ratings chief economist, Madan Sabnavis, said: "One of the most important aspects of today's announcement for banks would be less government interference in public sector banks' functioning. It is good that the government is making banks responsible for their action." Former State Bank of India chairman Pratip Chaudhuri said: "The ministry measures are a good beginning. But these need to be taken up by the government for actual implementation, which in turn, should improve PSU banks."