Public Sector Banks (PSBs) have Managerial Autonomy in terms of Human Resource Policies and Procedures, including Recruitment. As per inputs of PSBs, most of the PSBs have recruited experts/specialists through lateral entry as per their Recruitment Policy/Board approval, and a total of 2,277 lateral appointments have been made in the last three years.

Improvement of administration in PSBs is an ongoing process. Government has taken a number of steps in this regard in recent years. These include clear communication to PSBs that Government will not interfere in their working, separation of the posts of Chairman and Managing Director (MD) in nationalised banks into that of a Non-executive Chairman and an MD and Chief Executive Officer, selection of Whole-time Directors (WTDs) and Non-executive Chairmen of PSBs through the Banks Board Bureau, provision for performance-based extension in the appointment of WTDs in nationalised banks, and empowerment of Bank Boards through the PSB Reforms Agenda.

This was stated by Shri Shiv Pratap Shukla, Minister of State for Finance in written reply to a question in Rajya Sabha.

Lateral entry of domain experts reinforces managerial autonomy in public sector banks and strengthens board led governance. Public sector banks retain managerial autonomy over human resource policies and recruitment, permitting board approved lateral entry of domain experts and specialists to strengthen administration. Concurrent governance measures include clarification of government non interference, separation of Chairman and Chief Executive roles, selection of Whole time Directors and Non executive Chairmen via the Banks Board Bureau, performance based extensions for Whole time Directors, and broader empowerment of bank boards under the PSB reforms agenda.