The Department of Financial Services has asked public sector banks to start reforming their boards after merging various state-run banks on August 30, reports The Economic Times.
"With a view to institutionalise accountability for observance of approved risk appetite, the bank may give the board's risk committee a mandate to periodically review adherence to the risk appetite framework of the bank and to fix accountability in the event of breach of approved risk appetite," the department said in a letter.
Finance Minister Nirmala Sitharaman had on August 30 announced consolidation of 10 state-run banks into four, bringing the number of PSBs down to 12 from 27.
Moneycontrol could not independently verify the news.
The department has directed banks to form risk management committees, and to combine their remuneration and nomination committees, the report added.
Sitharaman had also announced that PSBs can appoint chief risk officers.
Following the merger, the combined entity of Punjab National Bank (PNB), Oriental Bank of Commerce (OBC) and United Bank of India (UBI) will become the country’s second-largest PSB.
PNB has said it will consider capital infusion of Rs 18,000 crore at its board meeting on September 5.
Union Bank of India, Andhra Bank and Corporation Bank will be merged, Canara Bank will be amalgamated with Syndicate Bank, and Allahabad Bank will be combined with Indian Bank.
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