Governance reforms in PSBs have been carried out through reforms like arms length selection of top management through Financial Services Institutions Bureau, introduction of non-executive chairmen in Nationalised Banks, widening talent pool and instituting performance-based extension for managing directors,
“EASE reforms have enabled objective and benchmarked progress on all key areas in PSBs such as governance, prudential lending, risk management, technology- and data-driven banking, and outcome-centric HR,” it added.
The government further said that amalgamation of PSBs has led to economies of scale, increase financial capacity, technology adoption and overall efficiency enhancement.
The government reforms in PSBs has also been supported by “massive technology adoption in banking”, which has been instrumental in expanding financial inclusion, improving efficiency, and enabling real-time service delivery.
The finance ministry further noted that the Banking Regulation (Amendment) Act, 2020 was brought in to enhance the governance, financial stability, and regulatory oversight of co-operative banks, which serve millions of citizens, particularly in rural and semi-urban areas.
“The Banking Laws (Amendment) Act, 2025 has been notified to enhance governance standards, strengthen protection for depositors and investors, improve audit quality in PSBs, shift statutory reporting by banks to the RBI and streamline nomination processes for customer convenience,” it added.
