‘Seniority must be basis for top jobs in financial sector’

DoPT asks FinMin to stick to the rules for LIC MD appointment.

Written by George Mathew | Mumbai | Published: June 24, 2014 9:35:51 am
DoPT asks FinMin to stick to the rules for LIC MD appointment. DoPT asks FinMin to stick to the rules for LIC MD appointment.

The Department of Personnel and Training (DoPT) which reports to Prime Minister Narendra Modi has made it clear that top-level appointments in the financial sector will have to be on the basis of seniority.

The instruction of DoPT, which recently asked the finance ministry to follow the norms in a specific case involving the appointment of the managing director of Life Insurance Corporation (LIC), will also be applicable to public sector banks while filling up top posts like executive director and chairman and managing director.

As many as six PSU banks will go headless in the next few months. While chairman and managing director positions at Indian Overseas bank and Bank of Baroda will fall vacant in August, Canara Bank and Oriental Bank of Commerce will go headless in October. Two managing director posts have been lying vacant at State Bank of India, the largest lender in the country. United Bank of India has been without a chairman for some months now.

The DoPT asked the ministry of finance to follow the principle of seniority while filling up the vacant post of managing director in LIC. The directive from the DoPT has come after some senior officials of the corporation who have put in more than 32 years of services and have residual services of three years or more had represented to it about how the finance ministry is excluding their names from selection process meant to appoint the fourth managing director of the corporation.

One post of managing director has been lying vacant after Sushoban Sarkar retired in May. DoPT norms are uniform for all financial institutions.

DoPT, after getting the representation, had asked the Appointments Committee of Cabinet (ACC) to ask the finance ministry to stick to the rules of seniority for selecting a candidate for the post of managing director of LIC.

The finance ministry, during the UPA government’s tenure, had justified its decision to exclude LIC officials from the selection process on the basis of a “policy” which warrants that all those officials who appear for the interview thrice consecutively but not been selected have to be excluded from the selection process for any new posts and fresh eligible candidates in order of seniority should be included in the zone of consideration.

The finance ministry argued that all these officials were part of selection process when chairman and three other managing directors of the corporation were selected and cannot be considered any further.

However, these officials had protested the application of such a guideline in their cases, saying that this guideline has no application in the case of a candidate who has been selected or recommended for selection but has not been appointed for want of vacancies.

Further, a top source pointed out that such guidelines relating to omission of people are not applied while making appointments for other PSUs, including public sector banks.

This is the second time when the finance ministry method of filling up top posts in LIC has been asked to be corrected.

Earlier, the cabinet secretary had found fault with the finance ministry’s attempt to fill up the fourth post of managing director which was created in 2013 in corporation without getting sanction from the cabinet. The ministry then corrected its move and appointed SB Mainak after formally getting sanction from ACC.

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