Leadership positions

PSBs should focus on grooming leaders

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In principle, the government's decision to open up senior positions in public-sector banks to candidates in the private sector can be viewed as a creative way of injecting management dynamism and competitiveness into a sector that accounts for a little over half the bank loans in the Indian system. The proposal can be seen as part of a trend that began some years ago with the lateral entry of non-bureaucrats at senior levels in the civil service to bring in sector expertise to specific ministries. This policy has largely been underwhelming for a number of reasons, including the unwillingness of the bureaucracy to cooperate with the lateral entrant. In the specific case of banking too, it is unclear whether offering leadership positions to private candidates will prove effective, on account of core differences in institutional values between private and public-sector banking.