Govt considers raising retirement age for PSU bank chiefs by 2 years

Besides the governor, the RBI communication sent to all public sector banks said, deputy governors, executive directors from its Department of Regulation as well as Supervision will be attending the meeting.

The finance ministry has initiated the process to appoint a new Reserve Bank deputy governor in place of MK Jain whose extended term is coming to an end in June

Though experts have ruled out any possible spillover impact on domestic banks given their strong balance sheets, the government wants to know from the lenders whether any policy intervention is required. A review will be undertaken likely on Saturday, sources said. The government has already been in touch with financial sector regulators.

The government said it is necessary to keep the system from slipping into deficit and to bring France in line with its European neighbours, where the legal retirement age is typically higher.

State Bank of India Chairman Dinesh Khara is likely to get an extension as the government is considering relaxing the retirement age of chiefs of all public sector banks and LIC. The proposal before the government also includes hiking the retirement age limit of managing directors of public sector banks (PSBs) to 62 years, from the current 60 years, a senior government official said on Saturday.

The Reserve Bank of India RBI was possibly buying dollars in spot and paying in forwards via public sector banks on Thursday to mop up foreign currency inflows three traders told Reuters

A bank executive said any such framework will also need approval from the Reserve Bank of India to ensure there are no breaches of regulatory norms. That discussion is also on, he said. In 2018, the government included the chairman, chief executive officers and managing directors of public sector banks in the list of individuals who could seek the issuance of LOC against offenders to prevent their escape from the country.

Amidst the Paytm controversy, Financial Services Secretary Vivek Joshi hinted at potential Reserve Bank clarifications due to the platform's extensive user base. Joshi highlighted the central bank's consumer protection focus. He affirmed the strong performance of public sector banks, emphasizing minimal government interference. Joshi outlined upcoming financial sector reforms, including amendments to banking and insurance laws. Additionally, he discussed strategies for capital infusion, addressing bank performance, and plans for distressed asset resolution.

From Indira Gandhi’s doodling at a meeting to discuss issues faced by the banking industry to how various powerful Ministers at the Centre and State tried to influence decisions at public sector banks, Narayanan Vaghul’s book, Reflections, is full of interesting and hilarious anecdotes that give a glimpse into the functioning of India’s banking sector after independence