The central government has increased the maximum tenure for CEOs and MDs of public sector banks to 10 years. This step will help the government to retain the capable management of the banking sector for a long time.
Stocks of public sector banks rise
There has been a decline in the stock market today. All except one sector on Nifty sector index decline is visible. In today’s business, only the index of public sector banks is trading with an increase.auto And compared to the decline of more than one percent in the realty sector, the stock index of public sector banks is seeing an increase of 0.7 percent. According to experts, there are signs of public sector banks coming back on track. Stocks While the government is getting the benefit, the sentiments have also improved due to the extension of the tenure of the CEO of public sector banks. After which the purchase has been seen.
Where did the stocks of public sector banks reach
Nifty PSU Bank was trading with a gain of more than half a percent in the last hour of trading. During this period, 9 out of 12 stocks included in the index were on the rise. Whereas in 6 the increase was more than 3 percent. Bank of Maharashtra had an increase of more than 7 percent, IOB more than 4 percent, Union Bank, UCO Bank, Central Bank and Punjab and Sindh Bank more than 3-3 percent. PNB was trading with a gain of more than 2 percent. On the other hand, the biggest decline was in Bank of Baroda. The stock is down about 1 percent. Indian Bank and Canara Bank were trading with limited losses and State Bank with limited gains.
Maximum tenure for CEO increased
The central government has increased the maximum tenure for CEOs and Managing Directors (MDs) of public sector banks to 10 years. This step will help the government to retain the best talent of the banking sector for a long time. Sentiments for the sector have improved with this news. The government issued a notification on 17 November 2022 stating that the term of appointment has been increased from the earlier five years to ten years now.
Earlier, the managing director or executive director of public sector banks used to get a maximum tenure of five years or till the age of 60 years (whichever is earlier). The same criteria used to apply for whole-time directors of public sector enterprises. This decision of the government will help the banks to retain such talents who have reached the post of full time directors at the age of 45-50 years.
Along with this, according to a report by BofA, there has been an improvement in the health of public sector banks for the last few years and the conditions have improved further in the September quarter of this year. The ROA of the banking sector has been the best in the last 8 years. And the growth of loans has almost reached the level of private banks. All these signs are benefiting the stocks.