Lok Sabha Question No. 2512 (UNSTARRED), answered on 2018-03-09
Subject: Performance Review of Heads of the PSBs
Ministry: FINANCE
Asked by: ASHOK SHANKARRAO CHAVAN, KUNWAR HARIBANSH SINGH, SUDHEER GUPTA, GAJANAN CHANDRAKANT KIRTIKAR, NARANBHAI KACHHADIA, ANWHAR RAAJHAA, T. RADHAKRISHNAN, BIDYUT BARAN MAHATO, VIJAY KUMAR S.R.

## GOVERNMENT  OF INDIA

## LOK SABHA

## MINISTRY  OF FINANCE DEPARTMENT  OF FINANCIAL SERVICES

## UNSTARRED QUESTION NO. 2512

TO BE ANSWERED  ON THE 9 TH  MARCH  2018/ PHALGUNA  18, 1939 (SAKA) Performance  Review of Heads of the PSBs

2512.   SHRI ASHOK SHANKARRAO SHRI SUDHEER GUPTA: SHRI NARANBHAI  KACHHADIYA: SHRI T. RADHAKRISHNAN: SHRI S.R. VIJAYA  KUMAR:

CHAVAN:         KUNWAR  HARIBANSH  SINGH: SHRI  GAJANAN  KIRTIKAR: SHRI  A.  ANWHAR  RAAJHAA: SHRI  BIDYUT BARAN  MAHATO:

Will  the Minister  of FINANCE  be pleased to state:

- (a) whether   the  Government   has  decided  to  initiate   a  performance   review   of  heads  of  the  Public Sector Banks (PSBs);
- (b) if so, the details  thereof  along  with  the aims  and objectives  thereto;
- (c) whether   the  Reserve   Bank of  India  has  also  put  12  PSBs  under watch   in  view   of  lagging   on certain  performance  parameters;
- (d) if so, the details  of these banks  along  with  the details  of the parameters  fixed by  the Government for PSBs; and
- (e) whether  the Government  has given instruction  to banks  to behave politely  while  dealing  with customers   and  if  so,  the  details   thereof   along   with   the  further   steps  taken/being   taken   by   the Government  to boost the performance  of PSBs?

## ANSWER

## The Minister  of State in the Ministry  of Finance (SHRI SHIV PRATAP  SHUKLA)

- (a) and (b): Government  has recently  announced  a PSB Reforms  Agenda  for responsive  and responsible banking,   which   encapsulates   a  synergistic   approach   for  ensuring   prudential   and  clean   lending,   better customer  service,  enhanced  credit  availability, focus on Micro,  Small  and Medium  Enterprises  (MSMEs), and better  governance.  Government  has asked Public  Sector  Banks (PSBs) to assign the Reforms  Agenda theme-wise to their Whole-Time Directors for monitoring and evaluate their performance in implementing  the assigned Reforms  Agenda.
- (c)  and (d): Reserve  Bank of India (RBI) has issued a Prompt  Corrective  Action  (PCA)  framework  to maintain  sound financial  health  of banks.  It facilitates  banks  in breach  of risk  thresholds  for identified areas of monitoring, viz. ,  capital,   asset  quality   and  profitability, to  take   corrective   measures   in  a  timely manner,   in  order   to  restore   their   financial   health.   Thus,   it  is  intended   to  encourage   banks   to  eschew certain   riskier activities   and  focus  on  conserving   capital   to  strengthen   them.   The   framework is  not intended  to constrain  normal  operations  of the banks  for the general  public.  RBI has placed eleven  PSBs, viz. , Dena Bank,  Central  Bank of India,  Bank of Maharashtra,  UCO  Bank,  IDBI Bank,  Oriental  Bank of Commerce,  Indian Overseas  Bank,  Corporation Bank,  Bank of India,  Allahabad  Bank and United  Bank of India,  under the  PCA framework.
- (e): Government  has recently  announced  a PSB Reforms  Agenda  for responsive  and responsible  banking, with   a  view   to  ensure, inter  alia, better   customer   service.   Under   the  Reforms   Agenda,   PSBs  have committed   to  Easy  Access  and  Service   Excellence   (EASE)  for  customer   comfort,   through   a  range   of measures,   including   courteous   staff,  pleasing   ambience,   customer   amenities,   digital   banking,   etc.  The Reforms  Agenda  includes  other  measures  for prudential  and clean lending,  enhanced  credit  availability, focus on MSMEs, and better  governance.