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Days after announcing the appointment of managing directors and chief executives at four public sector banks (Union Bank, Indian Overseas Bank, Oriental Bank of Commerce and Vijaya Bank) the government has begun the ground work to make selections for grade-A state-run banks Punjab National Bank, Bank of Baroda and Canara Bank.
Sources indicate IDBI Bank is also likely to be shifted to a category-A bank. According to finance ministry officials, they are aiming to fill up the remaining posts at PSBs within two months.
The government will split the position of chairman and managing director (CMD) and the priority is to fill the post of managing directors first.
Like the recent appointments, this time as well, PSBs would have a non-executive chairman, giving operational responsibility to the managing director and CEO.
The finance ministry said that the appointment process of state-run banks’ chairmen would also be announced shortly.
The government is looking to hire younger talent, preferably under 60 years of age. Such candidates need to have at least 15 years of experience, three of which should be as board members. They will need to spend four years as part of a Group-A bank.
“The plan is to tap the private sector. But that might be difficult, given the difference in compensation models at private and public sector banks,” said a senior finance ministry official.
Among the shortlisted candidates in the running for the posts is B K Batra, deputy managing director at IDBI Bank, who had earlier been in the race for the top job at United Bank of India.
Then there are B B Joshi, currently serving as executive director at Bank of Baroda; R K Goyal, executive director at Central Bank; and Mukesh Kumar Jain, executive director at Punjab and Sind Bank.
Some of the names under consideration are 58 years of age. The CMDs of PSBs were so far selected from other state banks only.
The appointments in PSBs are based on the recommendations of the Appointments Board chaired by the Reserve Bank Governor Raghuram Rajan.
The post of CMD of Bank of Baroda has been vacant since July 31, 2014 while Punjab National Bank and Canara Bank have been headless since October 2014.
In October last year, the government had cancelled the selection of heads of six state-run banks, beside 14 executive directors, as a government-appointed panel had found irregularities in the process.
These appointments had been made during the tenure of the earlier government.
The splitting of the CMD’s post was suggested by the Reserve Bank of India (RBI) to the finance ministry. RBI had contended CMDs of PSBs enjoy absolute power along with boards.
According to the central bank, the CMDs often dominate the board during their tenure and, therefore, separating the post of CMDs would aid in empowering the board.
