August 6, 2014 / 10:42 AM / 4 years ago

RBI Gov calls for stronger boards at state-run lenders

MUMBAI, Aug 6 (Reuters) - India’s central bank governor Raghuram Rajan said the boards at domestic public sector banks needed to be strengthened while the incentive structure for chief executives of these lenders need to be improved to enhance corporate governance.

Rajan, in an interview to ET Now television, also said salaries of public sector bank executives needed to be revised to bring them at par with salaries of executives at privately-owned lenders.

“We have to draw in people from the private sector who want to give back themselves, and in that way you will get talent into these public sector enterprises,” Rajan told ET Now.

The comments come after Indian police arrested the chairman of mid-sized state-run lender Syndicate Bank Ltd late on Saturday over allegations of taking bribes to grant loan extensions to a company. (Reporting by Neha Dasgupta and Himank Sharma; Editing by Rafael Nam)

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