Cong has 20 names for bank boards

The government is expected to appoint Nafisa Ali and Chandan Bagchi as non-official directors to boards of nationalised banks.

Both Ali and Baghchi are associated with the Congress. The government has already appointed seven Congress members to boards of nationalised banks.

Ali, who is proposed to be appointed to the board of Indian Bank, had lost the South Kolkata seat in the 2004 general elections on a Congress ticket. Baghchi is a former Bihar Youth Congress worker who has shifted base to Jharkhand.

According to sources, the finance ministry's financial sector division had put out a list having over 20 names against 40 vacancies on the boards of various nationalised banks. So far, around a dozen appointments, including those of the Congressmen, have been approved.

At least one-third of the remaining candidates, who are expected to be appointed, have been associated with the Congress party.

The earlier appointments were made with the concurrence of Finance Minister P Chidambaram and were approved by the Appointments Committee of the Cabinet headed by Prime Minister Manmohan Singh, the sources said. The same practice is being followed for the names that are pending. The list has also been vetted by the Reserve Bank of India.

In the latest set of appointments, at least seven persons associated with the Congress party have been appointed as directors to the boards of Bank of Baroda, Bank of Maharashtra, UCO bank, Union Bank of India, Canara bank and Bank of India.

After the United Progressive Alliance came to power last year, the finance ministry was planning to set up a nomination committee, on the lines recommended by the Narasimham Committee on banking sector reforms, for the selection of directors. For this, a list of 200-300 candidates was also to be prepared.

The ministry, however, decided against the proposal and recommended candidates referred to it by ministers and parliamentarians. It also considered the names of some who had applied for board positions on their own.

"The original idea was to appoint financial sector specialists, professors of IIMs and eminent people. But all that was lost somewhere and the ministry went ahead and appointed those who were referred to it by politicians," said a source.

Apart from the chairman, managing director and the executive director of a bank, a nationalised bank has a government nominee and a representative from the RBI on its board.

In case of listed banks, a shareholders' nominee is also appointed. Chartered accountants and agriculture and small scale industry specialists also find a place on boards of banks.