Appointments Board interviews candidates to head 4 financial institutions

Interviews are for EXIM Bank, India Infrastructure Finance Company, Sidbi and IFCI

The newly set up Appointments Board for selection of chiefs at four key financial institutions held the first round of interview on Thursday, to recommend a pick among 32 shortlisted candidates.

The board was set up after the refusal of the Banks Board Bureau (BBB) to recommend on heads for two of the four institutions.

The candidates shortlisted after eligibility and vigilance clearance include people from public sector banks (PSBs) and even the Reserve Bank of India, officials said. Four of them will be finalised after the second round of interviews on Friday to head the Export-Import Bank (EXIM Bank), India Infrastructure Finance Company (IIFCL), Small Industries Development Bank of India (Sidbi) and IFCI.

The board will recommend heads for all four financial institutions from a common pool. Ultimately, the selection will be made by the Appointments Committee of the Cabinet (ACC).

It was formed after the BBB said that it was not its mandate to appoint non-banking financial institution (NBFC) heads but only of PSBs and financial institutions (FIs). So, BBB declined to recommend candidates for IFCI and IIFCL, which it considered NBFCs. "Banks and FIs mean something for government and something else for BBB," said an official.

"The fact was also that the sitting fees of the two members of BBB come from public sector banks and not from NBFCs. There is no contribution from NBFCs," an official said. "But, it (the new board) is run on exactly the same lines as BBB and the system we follow for insurance companies."

The finance ministry was running short of time and so it respected the BBB decision, he added.

The appointments board also has members common with BBB. It comprises the secretary, department of financial services (DFS), Anjuly Chib Duggal; the secretary, department of personnel and training; a Reserve Bank of India deputy governor and some BBB members.

Even when BBB recommends selection of PSB heads, BBB chairman Vinod Rai is not part of the panel interviewing candidates, an official explained. He is involved in the process later.

Official sought to downplay differences between the ministry and the Rai-headed institution, saying both the BBB and the appointments board were appointed by the ACC and had some of the same members.

BBB was set up in April 2016 to fast-track appointments of heads of PSBs and financial institutions.

The appointments board might get dissolved, as the appointments will be made for a minimum of three years and those for the remaining two NBFCs, the National Bank for Agriculture and Rural Development and the National Housing Bank would take place in the distant future. "The board will likely be a one-off thing. After that, we will have to take a call whether to extend it," said an official.

The post of managing director (MD) at IFCI, the country's oldest financial institution, has been vacant since December 12. A vacancy for the head of IIFCL will come up in June. And, Sidbi has had no regular managing director since December, while the additional charge of MD at EXIM Bank was given to its Deputy MD, David Rasquinha, for a period of six months effective February 21.