The Centre is seeking to overhaul the human resources and risk management practices at state-run lenders, with North Block aiming to strengthen them through the infusion of Rs 2.11 lakh crore by way of fresh capital.A senior finance ministry official said that suggested changes include the provision for lateral entry from the private sector into specialised verticals, the establishment of a remuneration committee, and making boards more accountable by separating their management and supervisory functions.“Some recommendations have also been made by the Banks Board Bureau (BBB), and we are examining them. The idea is to make these banks more professionally managed and ensure that they are on a par with the private sector,” said the official cited above.In October, the government announced a Rs 2.11-lakh-crore capital infusion plan for these banks, of which Rs 1.35 lakh crore is to be raised through bonds. Finance minister Arun Jaitley had then said that the recapitalisation of stateowned banks would be followed by a series of reforms to make them more accountable.BBB chairman Vinod Rai refused to comment on the developments, but said that the recommendations made by BBB dovetail with the government’s initiative to professionalise state-run lenders.“You can’t have a one-sizefits-all policy. Our recommendations are in sync with the government’s agenda to transform banks,” said Rai. In its recommendations, the BBB has also suggested that a nomination and remuneration committee (NRC) be set up in banks, along the same lines as provided in the Companies Act, 2013.“We are engaged with all banks and lateral entry may be allowed at senior management and even board levels in specific areas such as information technology, human resource and risk management,” said another government official aware of the discussions.One of the other recommendations is to put in place a framework for assessment of the board and directors of PSBs on the lines provided for in the Companies Act, 2013. Some of these issues were also touched upon at the ‘PSB Manthan’, a two-day conclave of PSBs.“There was some discussion on how banks can be more responsible and responsive. It was also about restoring the pride of the banker and winning the hearts and minds of customers,” said a senior bank executive.The BBB has also asked all staterun banks to identify senior-level bank executives who can be groomed across functions to prepare a pipeline of leaders to take over as managing directors and chief executives.The proposed move to overhaul the remuneration structure at all banks is welcome, and overdue. Lateral entry, suggested by expert committees, will attract top talent. There is also a case to encourage competent senior personnel to continue at banks. A large slice of the salaries at the top level should be linked to profitability in the medium and long term. That is the only way to discourage short term profits on the back of risks that undermine sustainability.