Ever since direction relating to appointment of MDs in UCBs has been issued by RBI some sort of apprehension might of cropped in the minds of the MDs/CEOs about the challenges they are expected to face in future.
As far as financially sound well managed banks (FSWM) are concerned, there is no need for much anxiety. What is required is to revisit those areas of banking activity and administration which can be further improvised.
Business development in terms of resource mobilization and credit deployment has no limits. Even sky is not the limit. It depends on the enthusiasm of the BoD headed by the chairman/president and senior functionaries headed byMD/CEO. Since the banking business of the FSWM banks is fully stabilized in terms of inflow and outflow of funds, customer confidence they can fully concentrate on business development and internal control systems.
In respect of banks not covered under FSWM category, they have to focus on those areas which needs immediate attention. Normally those areas are higher level of NPA than the threshold limits,very volatile ALM mismatch, mismatch between income and expenditure such as higher level of interest payouts etc. The senior functionaries in consultation with BoD need to prepare a well defined monitorable action plan so as to strengthen the financials as well as the internal control systems.
The smooth transition from CEOs to MDs much depends on the corporate culture, professional management, compliance to Dos and Don’s by BoD and coherent / conducive environment in the affairs of the bank.