Mumbai | May 24, 2021 12:52:15 am
Even as Life Insurance Corporation (LIC) is gearing up for a mega IPO during the current fiscal, the government has extended the retirement age for the post from 60 to 62 as part of a major overhaul in the selection criteria for the top post of the largest financial institution in the country.
MR Kumar, Chairman, LIC, is now eligible to get an extension of one or two years following the change in the rules. Kumar, who was a Zonal Manager before being elevated to the post of the Chairman of the LIC on March 14 , 2019, was slated to retire in this June end after reaching 60.
The new rules, which were earlier proposed by the Ministry of Finance and approved by the Appointments Committee of Cabinet, headed by Prime Minister Narendra Modi, on April 22, say, “The Chairman, LIC, may be appointed for a period of three years, which was earlier five years, or till he/she attains the age of 62 years whichever is earlier.” It is not very clear now how many years Kumar will be granted extension till a specific letter to this effect from the MoF reaches the corporation.
Another important change in the new rules specifies that only Managing Directors of corporation are eligible for the selection of Chairman whereas under the earlier norms, MDs , executive directors(EDs) and zonal managers (Selection Grade) were all eligible to be part of selection process for the post LIC chairmanship.
Further, the new rule clarifies that all MDs in position on the date of vacancy irrespective of experience as MD can compete for the chairmanship. Also, no requirement of residual service of such candidate on the date of vacancy of chairman is required.
The earlier rule was that senior officials with minimum one year service as MD or two years’ service as ED or ZM (Selection Grade) can only be considered for the selection of chairmanship of the corporation. They also needed to have minimum two years of residual service on the date of vacancy. Analysts believe that apart from the much-needed continuity that is currently required at the top level of LIC, which is, at present, preparing itself for an IPO — in the range of Rs 50,000 crore to Rs 1 lakh crore — the government is laying down the rules for the appointment of LIC chairmanship in line with what it has already implemented in the case of chairmanship of SBI.
After Arundhati Bhattacharya, made chairperson of the bank in 2013, all officials who have been made chairman have been given tenures beyond 60 years. Dinesh Kumar Khara, 59, current chairman, has got a three-year tenure since October 2020. His predecessor Rajnish Kumar, at the age of 59, was appointed chairman for 3 years.
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