PSB heads no longer require finance ministry's permission to go on foreign trips

Heads of state-run banks will no longer require permission from the finance ministry to go on official foreign trips. In its endeavour to give more operational freedom to banks, the ministry has empowered the bank boards to approve such trips. 

The ministry said in a circular to all state-run financial institutions that whole-time directors of public sector banks andfinancial institutions can proceed on foreign trips without prior approval from the government. "We want to simplify the processes as the government understands that bankers may have to go abroad in concern with their foreign branches and other work related matters. If the board has approved of the visit, we do not see any reason why should we interfere," said a senior finance ministry official. 

At present, heads of state-run financial institutions need to take a board approval and then apprise the ministry about their foreign trips at least 10 working days before the commencement of the visit. 

"If the visit is scheduled over the prescribed limit the executives will have to seek permission from the government," said another finance ministry official. Under the existing guidelines, the chairmen of the country's largest bank, State Bank of India BSE -0.40 %, and the biggest insurer, Life Insurance Corporation, are authorised to be on foreign trips for 50 days in a calendar year. The same tenure is extended to the managing director of SBI, who heads the global banking division, and chairman of General Insurance Corporation. 

For heads of other financial institutions such as National Housing Bank, National Bank for Agriculture and Rural Development and India Infrastructure Finance Company, the tenure is limited to 30 days. 

Bankers welcomed the move and said that the government should look at changing some rules for foreign trips.