FinMin relaxes norms for CMD jobs in PSBs

As per new guidelines, candidate needs to complete one year as executive director to become eligible for chairman and managing director

The Union finance ministry has relaxed the norms for selection of a public sector bank’s chairman and managing director. Executive directors (EDs) appointed merely a couple of months earlier would now be allowed to appear in the interviews.

Earlier, one needed to have completed a year as ED. However, the criteria for residual service of two years of a candidate hasn’t been changed.

Interestingly, the government has decided to interview the candidates as early as this week for vacancies that will not  arise before August 2014, after the general election. Also, the ministry seems to have kept aside the the communication made by the department of personnel and training on the observation of the Appointments Committee of the Cabinet (ACC) regarding appointment of top jobs in government banks and financial institutions. Among other things, a suggestion was made to revisit the requirement of residual service and introduction of a fixed tenure for the top post in PSBs.

The concept of a fixed tenure was introduced in State Bank of India (SBI) by giving the new chairperson a three-year term. The department of financial services was asked to examine if the same system could be extended to all PSBs.

Chandrakant Khaire, an opposition party MP from Maharashtra, has written to the finance ministry about the hurry in selecting CMDs before finalisation of the ACC guidelines.

While the government has decided to interview the candidates now,  clearance from the Central Vigilance Commission is only had a couple of months prior to the appointment.

A selection committee will interview 19 EDs of various PSBs for six positions that will become vacant in the next financial year, 2014-15. In the present financial year, chairmen of four PSBs will retire. The government is yet to fill vacancies in two, Andhra Bank and Bank of Maharashtra, where the chairman had retired in the past couple of months.

The selection committee is headed by Reserve Bank of India Governor Raghuram Rajan and includes officials from the finance ministry and the academic world.  According to banking sources, the new RBI governor was likely to break the tradition of sending his nominee (a deputy governor) and would be present during the interviews. These will be at the State Bank of India head office here and not in New Delhi as earlier.

THE AMENDMENT SPREE

* FinMin to interview executive directors this week for CMD vacancies arising only after August 2014

* CMDs of six public sector banks to retire in 2014-15

* This may be the first time the RBI governor conducts the interviews

* Unlike SBI, there is no fixed tenure for the chairman in public sector banks

* Appointment process in govt banks may turn into a political slugfest