Chairman appointment norms in govt banks relaxed

Search panel to interview candidates for CMD, ED posts next week

The government has relaxed the eligibility criteria for the appointment of chairman and managing director in public sector banks.  The search committee for selecting chairman and managing directors and also executive directors in public sector banks– for appointments in 2013-14 – will interview the candidates next week.

Around nine public sector bank chiefs will hang up their boots in the next financial year.

Now, a candidate who has served the executive director’s position for minimum 6 months has will become eligible. Initially, a candidate who served as 2 years as ED were eligible for becoming a chairman, which was later reduced to 1 year. However, this year if the 1 year ED criteria was applied only nine candidates were eligible while the number of CMD positions that will fall vacant in 2013-14 is also nine.

Relaxations were also made in the residual period of existing EDs.  Earlier, EDs with two years of remaining service were eligible. This time, EDs have 21 months service left has been called.
According to bankers, the search panel will interview 17-18 candidates, and some of the candidates from earlier batch will also appear for the interview.

The search panel, which will interview the candidates includes, banking secretary Rajiv Takru, and Reserve Bank of India’s deputy governor Anand Sinha, apart from one retired deputy governor and two professors from management institutes.

In 2013-14, CMDs of public sector bank like IDBI Bank, Central Bank of India, Union Bank of India, Allahabad Bank, Andhra Bank, and Bank of Maharashtra will retire.

The search panel has also called around 35 general managers who will be promoted for the executive director’s post. Apart from superannuation of executive directors, the government also wants the number of executive directors in banks. For example, all banks that have crossed Rs 2 lakh crore of business now have 2 EDs and large banks having business of more than Rs 3 lakh crore will have three EDs.

Till now, only three banks, Punjab National Bank, Bank of Baroda and Bank of India have three executive directors. A third ED will be appointed in Union Bank of India, Central Bank of India and Canara Bank. The finance ministry wants the one ED of a public sector bank to exclusively focus on human resources and information technology.