FM's advice of IBA chief from pvt sector makes PSBs see red

Last Updated: Sat, Nov 24, 2012 18:50 hrs

While prodding the private sector lenders to be more active in BANCON — the annual banking conclave — finance minister P Chidambaram also suggested of making future chairpersons of Indian Banks’ Association from private sector banks.

Typically, IBA chairman was selected from public sector banks as they have majority in the bank body, in terms of voting power. In fact, few years back when a high-profile private sector chief executive was proposed to head IBA, public sector banks shot down the proposal, conceded a public sector banker.

In a strange coincidence, chiefs of large private banks were conspicuous by their absence from BANCON 2012 – a two day event, which was currently being held in Pune.

Benefit of being small
Smaller public sector banks are relieved that they did not received call from the finance ministry on Friday regarding the offer sale of Hindustan Copper. Finance ministry had asked the large banks and Life Insurance Corporation of India to buy shares of Hindustan Copper. “Couple of years back, we were asked to invest in NMDC, which was trading at nearly 50 per cent discount than the price at we brought the shares,” said a chief executive of a government-owned bank.

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