Govt may relax rules for appointing bank chiefs

Candidate may not need two-year residual service.

With close to a dozen bank chiefs due to retire this year, the government is planning to relax the norms for appointment of chairmen and managing directors of state-run banks.

According to the current norms, the candidates should have at least two years of service left. The finance ministry has put out a note that proposes to reduce the residual service period to one year and nine months, according to sources. Public sector bank executives retire at 60 years.

The proposal is awaiting Finance Minister Pranab Mukherjee’s approval and the change is expected to be implemented for the next round of appointments.

Sources said the ministry had shortlisted 10 executive directors who would be called for the interviews, likely to be conducted next month.

Starting with United Bank of India (UBI) in February, 11 bank chiefs, the highest in recent years, will retire this year. In March, Indian Bank Chairman and Managing Director MS Sundara Rajan is due to retire, followed by chiefs of Punjab and Sind Bank, IDBI Bank, Corporation Bank, Canara Bank, Andhra Bank, Bank of Maharashtra, UCO Bank, Indian Overseas Bank and Oriental Bank of Commerce.

The government has already sought consents from UBI and Indian Bank heads. Dena Bank Executive Director Bhaskar Sen is expected to replace SC Gupta at UBI and the Kolkata-headquartered bank’s executive director, TM Bhasin, is expected to move to Indian Bank.

In case of all government banks, except six, the government promotes executive directors as chairmen. The exceptions are six large banks — Punjab National Bank, Bank of Baroda, Canara Bank, Bank of India, Union Bank of India and Central Bank of India. Chairmen of smaller banks are laterally moved to these large banks.

Dena Bank Chairman and Managing Director DL Rawal, who served as an executive director at Canara Bank, is a likely replacement for

Mahajan, who retires later in the year.