Govt asks state-run banks' CEOs to work 'harder, faster' to list subsidiaries

New Delhi: The Department of Financial Services Secretary M Nagaraju on Friday exhorted heads of state-run banks to "work harder and faster" to list subsidiaries on the bourses.

Speaking at the listing ceremony of Canara HSBC Life Insurance Company here, Nagaraju said there are over 100 entities and subsidiaries which come under the department headed by him, and listed out the advantages of an IPO.

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A listing helps unlock value for the shareholders, and also ups the corporate governance standards at companies as they come under the glare of regulations and investors, he said.

Pointing out specifically to the managing director and chief executives of a slew of big institutions, including Bank of Baroda, Punjab National Bank, Union Bank of India and Bank of India, present in the audience, Nagaraju made the expectations of the government clear.

"... everybody is here. I hope they are getting the message. That you should work harder, faster to list some of your subsidiaries so that people of the country will be able to participate in the value creation," he added.

The DFS would like to list companies as and when they "mature", the Secretary said, adding that it will lead to market oversight on the functioning of the companies.

"The major big objective of listing a company is to unlock value and for improving corporate governance," he said.

He also urged insurers to ensure that they settle claims in right earnest without taking recourse to any strategies for denying it.

"We have to ensure that whatever is the risk insured by the people is fulfilled, that is the moral and legal obligation instead of engaging circuitous route of denying and annulment," he said.

The bureaucrat said increasing the claims settlement ratio is the only way to increase insurance penetration in the country, he said, adding that this will also give a fillip to the financial inclusion agenda.

The market also rewards entities with better claims settlement ratios, he said, pointing out that the ones with better ratios have been able to increase their market shares, while it has been stagnant or also declined for ones with poor ratios.

After a flat opening on listing day, the Canara HSBC Life Insurance Company scrip gained 5.19 percent to close the trading session at Rs 111.50 a piece on the BSE on Friday.

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