Question : DIRECTORS OF BANKS

(a) whether the Government continue to appoint a number of social workers, political activists and others in various professions to the banks as Directors without equity;

(b) if so, the reasons for this practice;

(c) whether such nominees are not held responsible for the bad loans and other culpable activities of the bank management;

(d) if so, the purpose and criteria of appointment of such directors;

(e) whether the Government propose to review such patronage; and

(f) if so, the action taken in this regard?

THE MINISTER OF STATE IN THE MINISTRY OF FINANCE AND COMPANY AFFAIRS (SHRI ANANDRAO VITHOBA ADSUL):

(a) and (b) Appointments of directors on the boards of public sector banks are made in accordance with the criteria and procedures prescribed in the relevant statues.

(c) and (d) The general superintendence, direction and management of public sector banks vests with their respective Boards. The non-official director of a public sector bank has no credit sanctioning powers in individual capacity. The decisions in this regard are taken by the Board which is responsible for it.

(e) and (f) It is proposed to amend some of the Sections dealing with the nomination of non-official directors of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/80. A Bill in this regard was introduced in the Lok Sabha. This has been referred to Standing Committee of Finance.