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Jockying for position

SOME chairmen and managing directors (CMDs) of banks will step out of their offices for the last time today. New Delhi should be naming the new incumbents though none knows when as the selection process is dense with `influence' overtaking merit. Private ly bankers concede CMD appointments are mostly deals with ruling party politicians and the corporates backing them. The chosen few CMDs generally have to be easy with advancing some Rs. 50 to Rs. 100 crores loans to particular groups or companies after t he appointment orders are signed. Never mind, the companies are on the sick list or on flight to BIFR.

To be a CMD is a once in a life opportunity and if one has to place one's hands in the till so be it. After all the loans will just become another NPA and the CMD can proudly tell the press that he has fully provided for all NPAs. Then there are cases of CMD in a small bank in the south trying to get the chief's job in a big bank with a large number of foreign branches in Mumbai (to be assured of monthly foreign trips and also meet up their children who are invariably settled in the West). At the moment one top executive is precisely doing the same and is sure of winning being backed by one of the biggest corporates.

One banker quipped: ``CMD posts are on sale and Indian Bank proves it.'' And then the retired bankers have to be accommodated on standing or sitting committees for the perks to continue. After all, one cannot even think of or accept top bankers travellin g second class in Mumbai's local trains. Mr. Maya Shankar Verma (at the time of writing) is the chairman of IDBI Bank, honorary adviser to the RBI and chairman of TRAI. This record will be hard to match even if it violates some basic rules of corporate g overnance. There are also instances of CMDs clearing corporate loans in a jiffy before retiring to enjoy post-retirement benefits.

Of course the strong and mighty officialdom manning the Finance Ministry will deny all such suggestions. ``There is no proof,'' they will claim. But is there any proof for any misdeed in this honourable country? After all the Appointments Board headed b y the RBI Governor sends in the first list. It then goes to the Finance Minister and the Banking Department in the Finance Ministry which prepares individual notes after making references to the Central Vigilance Commission (CVC) and the CBI. The entire list is then sent to the Appointments Committee of the Cabinet and further on to the Prime Minister for his personal okay. The files containing the appointment letters have to bear the PM's signature. At no point of time the humble depositor of a few hun dred rupees in a bank is ever told of who will manage his funds. It is only given to the depositor to be humiliated. And there is not going to be any change in these primeval practices as banks will continue to be government-owned through Parliament even after government equity drops to 33 per cent.

If after all this can any bank chief speak up to the RBI or the Finance Ministry even at closed door meetings? Can NPAs come down despite all the tightening when one senior official in the Finance Ministry is known to coerce bank chiefs to extend funds v iolating all norms? The current selection process assures a term of about a year or two and it suits the CMDs to play around with bank balance sheets. Nothing will change in Indian cricket and Indian banking.

P. Devarajan