The Hindu Business Line : Naidu headhunting for co-op banks

MR Chandrababu Naidu, Chief Minister of Andhra Pradesh, has approached the largest bank in the country, State Bank of India, for sourcing management talent to restore the health of the State's beleaguered co-operative banks.

According to banking sources, the CM is seeking top-level executives to head several co-operative banks. The State Government's move follows the growing number of cases related to mismanagement of funds by co-operative banks. There have been reports of many banks facing financial crisis due to one reason or the other over the past few months.

According to bankers, one of the key factors that led to crisis in co-operative banks is that these banks are not run "professionally." Most of them do not adhere to prudential lending norms. Many of them have also been offering very high interest rates on deposits in a bid to compete with each other without keeping in mind possible repercussions, said a banking analyst.

Mr Naidu is mainly hunting for MDs and CEOs and other officials with expertise in treasury operations for the 22 district central co-op banks. The idea is to induct personnel with experience in banking and expertise in asset liability management and thereby inculcate the best practices in the co-op system.

The public sector SBI, which has been a source of talent for many public and private sector banks in the country, is understood to have agreed to send its personnel on deputation.

However, going by the information, the package being offered by the Government is not attractive enough to lure the best talent. "Co-operative banks have a history of political interference and other kinds of problems. Besides, the salary being offered is not enough to lure those who are working in metros, as they might not be willing to let go off the huge canvass they have here," said an official with a public sector bank.

"It is possible that a grade or two junior to the one being looked at might be interested," he said.

However, bankers appreciate the initiative being taken by Mr Naidu.

Article E-Mail :: Comment :: Syndication

Stories in this Section
Operators agree on interconnection issue — All clear for IUC regime: TRAI

Idea reduces cell-to-cell STD rates

AI to cut services to Singapore

Maruti's landmark roll-out

Threshold limit hiked for FII/NRI investments

Kotak Bank's `high-yield' a/c attracts NRIs

Govt firms up steps to deal with strike

Naidu headhunting for co-op banks