Finance Minister Approves Expansion of Senior Management Structure in Nationalized Banks

In a significant move aimed at enhancing the administrative structure and efficiency of nationalized banks, the Finance Minister has approved the creation of the Chief General Manager (CGM) post below the board level in five additional nationalized banks: Bank of Maharashtra, Central Bank of India, Indian Overseas Bank, Punjab & Sind Bank, and UCO Bank. This follows the presence of CGM positions in six out of eleven nationalized banks. Along with creating the new CGM roles, the Finance Minister also approved an increase in the number of CGMs in banks where the posts already exist.

Strategic Role of CGM in Banks

The CGM role acts as a critical intermediary between General Managers (GM) and the Executive Director (board-level) in these nationalized banks. With the expanded CGM posts, banks will be better equipped to monitor and manage key operational areas, including digitalization, cybersecurity, fintech, risk management, compliance, and financial inclusion. This step will also enhance supervision in core banking sub-domains such as retail credit, agriculture credit, and MSME credit, which will lead to more precise strategies and improved performance.

Improved Organizational Structure

The number of CGM posts has been revised according to the business mix of the banks as of March 31, 2023, with one CGM for every four GMs. This revision has far-reaching benefits beyond just the CGM level, as it will create a ripple effect down the management hierarchy, increasing opportunities for Deputy General Managers (DGM) and Assistant General Managers (AGM). For every CGM post created, four GM posts, twelve DGM posts, and thirty-six AGM posts will also be added.

Expanded Senior Management Capacity

Following this expansion, the total number of CGM posts across the 11 nationalized banks will increase from 80 to 144, with GM posts rising from 440 to 576, DGM posts from 1,320 to 1,728, and AGM posts from 3,960 to 5,184. This growth in the senior management structure will result in better oversight, especially in the area of asset management, and help banks in the identification and mitigation of risks, essential in today's increasingly complex financial landscape.

Responding to Growth and Expansion Demands

This decision comes in response to growing demands from various nationalized banks, which have seen substantial increases in business volume, branch expansions, and the need for stronger vertical management. By strengthening the senior management pyramid, this initiative aims to meet the evolving needs of banks while ensuring a higher degree of control, supervision, and efficiency.

This expansion of senior roles is seen as a crucial move in improving the operational capabilities of India's nationalized banks, ensuring they are well-equipped to meet future challenges while maintaining a high level of service and oversight.