Bank of Baroda chief P S Jayakumar may get extension from the government

The government may give extension to Bank of Baroda Managing Director and CEO P S Jayakumar based on the assessment of his three-year performance, sources said.

Jayakumar was one of the two selected from the private sector and joined the state-owned bank in October 2015.

He was appointed for a three-year term that will come to an end on October 12, 2018.

According to sources, the government will take a final call on his extension after the objective assessment of his performance.

Soon after he assumed charge, BoB made a loss of Rs 3,342 crore in the third quarter (October-December) of 2015-16. In the subsequent quarter too, the lender posted a loss of Rs 3,230.1 crore.

However, the situation got better from the first quarter of 2016-17 when the bank earned a profit of Rs 423.6 crore going further up in the second quarter to Rs 552.1 crore but it declined to Rs 252.6 crore in the third quarter and in the last quarter, it was Rs 154.7 crore.

The bank again posted a hefty loss of Rs 3102.3 crore in the fourth quarter (January-March) 2017-18. However, the bank earned a profit of Rs 528.2 crore in the first quarter of the current fiscal, as per data available on the BSE. 

So during Jayakumar's stint of 11 quarters, the bank has posted a loss of Rs 9,674.4 crore while earned a profit of Rs 2,581.5 crore. On the net basis, the bank posted net loss of Rs 7,092.9 crore during his stint.

Jayakumar's assignment also assumes significance as the government introduced a significant policy change allowing private sector professionals to head public sector banks.

Watch Zee Business video here:

In mid-August 2015, the government had roped in private sector professionals to run two of its largest banks - Bank of Baroda and Canara Bank. 

The government named Rakesh Sharma of Lakshmi Vilas Bank the new MD and CEO of Canara Bank. 

To induct private sector professionals at top positions at PSBs is seen as a part of process to reform the public sector industry, which accounts for over 70 per cent of the banking business, but is struggling to deal with mounting bad loans.