Fin sector may see 'facelift' this year as term of many honchos set to end

BBB starts selection process as nearly half a dozen public sector bank CEOs' term comes to an end

Starting this month, the Indian financial sector may see new faces at the top with quite a few managing directors' and chief executive officers' terms coming to end this year. In addition, Reserve Bank of India's governor and two of the deputy governor’s three-year terms end in 2021. Also, Insurance Regulatory and Development Authority of India’s Chairman Subhash Chandra Khuntia’s term ends in May. He was appointed in 2018.

Public sector banks
 

The first government-owned bank to get a new chief executive this year will be Mumbai-based Central Bank of India when Pallav Mohapatra, MD & CEO hangs up his boots in February after he attains the retirement age of 60. Matam Venkat Rao, executive director of Canara Bank, will be the new MD & CEO of the Central Bank of India.
 

Next will be Padmaja Chunduru, MD & CEO of Chennai-based Indian Bank, who will retire in August.
 

According to sources from the banking industry, the Banks Board Bureau (BBB) has initiated the selection process for the next financial year. BBB has sought names and profiles of eligible candidates for both executive directors and managing directors. Chief general managers and general managers of public sector banks will be eligible for the post of executive director. Deputy managing directors of SBI and executive director of public sector banks will be eligible for the selection as MD & CEO. Typically, a candidate having minimum two years of residual services are considered eligible for promotion, bankers said. BBB, set up by the NDA government and which started functioning from April 1, 2016 is entrusted with the selection of top management in public sector banks though the appointments are made by the government.
 

The tenure of the MDs & CEOs of Punjab National Bank, UCO Bank and Bank of Maharashtra will end this year though they are all eligible for extension. Unlike the previous UPA government, the current NDA government has not extended terms of many MDs & CEOs despite their eligiblity. It is yet to be seen if the government extends the terms of Mds & CEOs this time around.
 

Punjab National Bank’s MD & CEO SS Mallikarjuna Rao was appointed in October 2019, till September 2021. Rao will be eligible for extension once he attains 60 in January 2022.
 

Atul Kumar Goel, MD & CEO of UCO Bank was appointed for three years in November 2018. After completing his current term, Goel will have another three years of service left.
 

Similarly, A S Rajeev, the MD & CEO of Bank of Maharashtra, was appointed for three years in December 2018. After completing the present term, Rajeev will have three years of service left.
 

Central bank vacancies
 

Apart from the commercial banks, there could be some new faces in the Reserve Bank of India. Two of RBI’s deputy governors will complete their term this year.
 

First is Deputy Governor BP Kanungo, who was first appointed in April 2017 for three years and got a one-year extension last year. His present term ends in April. Kanungo is in charge of important portfolios like currency management, payments and settlement and foreign exchange department.
 

Another deputy governor, M K Jain, who was appointed in 2018 will complete his tenure in June. Jain handles the department of supervision, human resources, among others. Both Kanungo and Jain will be eligible for extension.
 

Perhaps the most watched appointment of 2021 is going to be that of the RBI governor, as Shaktikanta Das’ three year tenure will come to an end in December. Das was appointed in December 2018 after the surprise resignation of Urjit Patel who quit 9 months before his term ended. RBI under Das has been proactive in tackling the economic slowdown as the central bank started to reduce interest rates as early as February 2019. The monetary policy committee of RBI, which is chaired by Das, has promised to maintain the accommodative stance of policy ‘as long as necessary’ to revive growth on a durable basis. Das is eligible for extension.
 

Typically, in the post liberalisation era i.e. since 1991, most RBI governors were appointed for three years and were considered for another two years of extension. There were a few exceptions, though.
 

S Venkitaramanan, a member of the Indian Administrative Service and who served as finance secretary was appointed in December 1990 for a two year term which ended in December 1992.
 

Bimal Jalan had nearly a six year tenure from November 1997 to September 2003. His successor YV Reddy had a five year term from September 2003 to September 2008 and D Subbrao Rao from September 2008 to September 2013. Subbarao was initially given a three-year term which was extended by another two years. Subbarao’s successor Raghuram Rajan, who was appointed for three years,  declined further extension after the end of his tenure. Rajan was succeeded by Urjit Patel.
 

IRDAI & Sebi
 

IRDAI Chairman SC Kuntia, who was appointed in 2018, will also complete his three-year term in May. He is also eligible for extension.
 

In a year from now, Ajay Tyagi, chairman of Securities and Exchange Board of India (Sebi) will also complete his term.

Tyagi, a 1984 batch IAS officer of Himachal Pradesh cadre, was appointed as the Sebi chairman in March 2017 for three years. In March 2020, his term was extended by six months and then again in August 2020, his term was extended for 18 months, i.e., till February 2022. Tyagi (62) is also eligible for extension since the retirement age for Sebi chairman is 65 years.