New hiring at Indian Banks' Association sparks controversy

Saikat Das
moneycontrol.com

The Indian Banks' Association (IBA) sparked off a fresh controversy relating to an appointment for the post of chief executive, which will fall vacant after the existing incumbent - K Ramakrishnan demits office by July end. K R Kamath, the chairman of the industry body is believed to have appointed M V Tanksale, the CMD of Central Bank of India (CBI) as the new office bearer, industry sources told moneycontrol.com.

However, there is so far no official communication in this regard from IBA.

Kamath also heads the Punjab National Bank (PNB) as CMD. Tanksale, who had served PNB as the executive director under Kamath will retire this month from the Central Bank of India. Tanksale had joined the central bank of India in October, 2011.

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However, the process of appointment is something that has raised many eye brows. As per the standard practice, IBA generally floats public notice and invites applications for posts lying vacant. This time, it is alleged, the practice is flouted.

"IBA did not float any public notice seeking applications for the post. IBA has appointed Tanksale quite arbitrarily," a senior official familiar with the development told moneycontrol.com. He did not wish to be named.

"There are other competent candidates who have been overlooked. It is a bad precedent being set. We fear this may be followed in future as well," the person said.

A mail sent to K R Kamath on July 12 with a questionnaire did not elicit any response at the time of writing this article. It is learnt, IBA on Tuesday is holding a meeting here in Mumbai on various issues including this. Tanksale could not be reached for his comments.

After assuming charge at CBI, Tanksale had focused more on recovering and upgrading loan accounts. At that time, the lender was struggling with higher degree of stress assets.

The bank's gross net performing asset (NPA) ratio stood at 4.80 percent during January-March quarter, 2012-13 while it was at 4.83 percent in the corresponding quarter of the previous year FY12. Net NPA ratio was at 2.90 percent in Q4, FY13 as against 3.10 percent a year back.

saikat.das@network18online.com