The credit approval limit for the public sector lenders has been increased fourfolds by the Government. The limit earlier was Rs. 100 crore which has now been increased to Rs. 400 crore.

A credit approval committee has been asked to set up to the banks by the government. Chairman, Executive Directors and three chief General Managers are to be the part of this committee.

The 400 crore limit is defined only for the Category ‘A' banks. For the smaller banks the limit is set at Rs. 250 crore.

The Chairman and Managing Director of Punjab National Bank, Mr. K. R. Kamath said, "The new initiative will help in facilitating credit disbursement at a much faster pace."

"The government decision would enable the management to take operational decision and the board could focus on policy matters," said S. Ravi, shareholder director at Union Bank.

At present, the decision of the credit approval is taken by a committee which comprises of nominee from Reserve Bank of India and two independent directors appointed by rotation, the bank's chairman and managing director and executive directors.

A former Chairman of a public sector bank said, "Though a credit approval committee has replaced the board's management committee, the two are significantly different. The MCB has outside members such as RBI nominee and independent directors; the new committee comprises two EDs and chief general managers, who report to the CMD."