Jayakumar takes over as MD and CEO of Bank of Baroda

P S Jayakumar, the former chief executive of VBHC Value Homes, on Tuesday took charge as the new MD and CEO of the state-owned Bank of Baroda for three years. "Bank of Baroda has said P S Jayakumar has assumed the charge of the office of Managing Director and CEO, Bank of Baroda, on October 13, 2015," it said in a filing on BSE. P S Jayakumar, 53, has taken over as the chief of BoB at a time when the bank is under the investigation glare for an alleged fraud and black money transactions worth over Rs 6,000 crore.

Last week, it was alleged that a whopping Rs 6,172 crore was remitted from Bank of Baroda to Hong Kong camouflaged as payments for non-existent imports like cashew, pulses and rice. The amount was allegedly deposited in 59 accounts in cash as advance for imports that never existed. However, the bank's Executive director B B Joshi yesterday clarified that the amount being mentioned was "exaggerated" and the actual amount involved was only half of it.

Jayakumar's new assignment also assumes significance as the government has introduced a significant policy change allowing private sector professionals to head PSBs. In mid-August this year, the government had roped in private sector professionals to run two of its largest banks  Bank of Baroda and Canara Bank. Ravi Venkatesan, ex-chairman of Microsoft India, has been appointed the non-executive Chairman of BoB.

The government has also named Rakesh Sharma of Lakshmi Vilas Bank the new MD and CEO of Canara Bank. To induct private sector professionals at top positions at PSBs is seen as a part of process to reform the public sector industry, which accounts for over 70 percent of the banking business, but is struggling to deal with mounting bad loans. In the past, heads of public sector banks were selected from among state-run banks or government bodies.