Govt banks' CEO selection opened to private sector

This is also the first time a public advertisement seeking applications has been put up on the Union finance ministry's website

In an unprecedented move, the government has invited applications from private sector candidates for the position of chief executives in public sector banks (PSBs). This is also the first time there is a public advertisement seeking applications, put up on the Union finance ministry’s website.

Applications are invited for the post of managing director and chief executive officer (MD & CEO) in five entities – Bank of Baroda (BoB), Canara Bank, Punjab National Bank (PNB), Bank of India (BoI) and IDBI Bank. Those in BoB, Canara and PNB are vacant and the chief executives of BoI and IDBI will retire in May and June, respectively.

In December last year, the government had decided to split the charge of chairman and managing director in PSBs. Government-run banks are to now have a MD & CEO, and a non-executive chairman.

Those between 45 and 55 years of age will be eligible to apply and should have at least three years of board-level experience. One may apply for vacancies without a limit.

“The candidate should have at least 15 years of mainstream banking experience, of which three years should at least be at the board level,” said the finance ministry. Those selected will be given a fixed tenure of three years; the retirement age will be 60 years. Those selected must join within 30 days from the date of offer, extendable by another 30 days on request.

The ad says if the selected candidate fails to join even after the notice, he/she shall be barred from consideration for appointment in all PSBs or autonomous bodies or statutory or regulatory ones for three years. The applications will be screened by a committee and suitable candidates chosen for an interaction with the selection committee, which will make recommendations to the government.

Along with the application form, the candidates have to give attested annual confidential reports of the past five years and vigilance clearance certification that no disciplinary or criminal proceedings are either pending or contemplated.

Public sector bankers who meet the eligibility criteria will also be able to apply. The move paves the way for several State Bank of India officials, particularly  heading subsidiaries and associate banks, since they have board-level experience.

The move will also open an opportunity to private sector bankers who aspire to head a bank. The Reserve Bank of India recently raised the retirement age of an MD & CEO in private banks to 70 years, from the earlier 65. CEOs of leading private sector banks still have at least five years before they retire.