The silent rise of the public sector banker in private bank boards

livemint.com:

MUMBAI : Public-sector bankers who would hang up their boots at the end of a long career are increasingly joining boards of private-sector banks, which are welcoming these experienced hands to help navigate a demanding compliance landscape. To a smaller extent, state-run banks are also seeing a similar influx from the private sector, as they seek complementary skills to compete better for customers. Boards of several top private banks are led by former public-sector officials, either from the Reserve Bank of India (RBI), or the civil service.

Chairmen of Axis Bank, Federal Bank and AU Small Finance Bank were previously with RBI, while those of HDFC Bank and ICICI Bank are retired IAS officials. “There is ‘publicization’ of private-sector banks happening currently," the chief executive of a private-sector bank said on the condition of anonymity. In several cases, directors also are from public-sector banks or RBI.

At Axis Bank, five out of 13 board members are from the public sector, including two retired RBI officials, two senior public-sector bank officials and one former Life Insurance Corporation of India Ltd official, who is a nominee director. Similarly, Federal Bank has two former RBI officials and two former State Bank of India (SBI) officials. Yes Bank has three retired bankers, including two nominee directors of SBI, and a former RBI official as chairman.

Both HDFC Bank and ICICI Bank have four board members from the public sector, while RBL Bank has five. “Given the focus on governance and scrutiny, board-level committees are looking for people with more banking experience. Professionals from state-run banks have a better understanding of processes and banking regulations.