Appointments of chairmen for at least ten public sector banks (PSBs) is likely to get delayed or witness major changes over the next six months following the government’s move to tighten the selection process of chairmen and managing director positions in PSU banks.
Further, top positions in two regulatory bodies — insurance regulator IRDA and pension regulator PFRDA — and the chairman post in UTI Mutual Fund have been lying vacant for quite some time.
As many as 4 PSU banks are already functioning without a chairman and an MD. “The next batch of appointments is likely to be done only after the government finalises the new norms for appointment of bank chairman. The government is now expected to split the role of chairman and MD posts as recommended by several committees and former RBI governors. The process followed by the UPA government in its last months in office is unlikely to be followed,” said a top-level source. There is yet to be clarity on who will be the chairman, whether it should be a serving or a retired banker or a non banker, he said.
While Indian Overseas Bank chairman M Narendra retired last month, Bank of Baroda CMD SS Mundra has shifted to the RBI as Deputy Governor. United Bank of India has been without a chairman for some months now after the exit of Archana Bhargava as CMD. The government is likely to bring a new chairman and MD for Syndicate Bank with its CMD SK Jain behind the bars for alleged bribery charges. Canara Bank CMD RK Dubey and Oriental Bank of Commerce CMD SL Bansal are retiring within two months.
The CMDs of Union Bank of India, Vijaya Bank, Punjab and Sind Bank and Allahabad Bank are set to retire within the next six months — over the November-January period.
A panel, led by RBI Governor Raghuram Rajan, interviewed 19 executive directors of PSBs in October last year for six chairmen’s positions that will fall vacant between August 2014 and March 2015.
“There’s apprehension that same ‘unfair practices’ might have played a role in the selection of CMDs during the previous regime,” an official source said.
Among regulatory bodies, the government is yet to fill up the post of member (Life) in IRDA. Similarly, it has not yet appointed a chairman for pension regulator PFRDA after the exit of Yogesh Agarwal last November. RV Verma, Member, is officiating as chairman. In UTI MF, there has been no chairman for over three years now. The Department of Personnel and Training (DoPT) had recently asked the finance ministry to follow the principle of seniority while filling up the vacant post of MD in LIC.
The directive from the DoPT came after some senior officials of the corporation who have put in more than 32 years of service and have residual services of three years or more had represented to it about how the finance ministry is excluding their names from the selection process meant to appoint the fourth managing director of the corporation.