Govt opens managing director post at SBI to other PSB executives

From now on, executive directors at state-owned banks can compete for the post of managing director (MD) at the country’s largest lender, the State Bank of India (SBI). 

On Monday, the government decided to allow executive directors of state-owned banks to apply for the post of managing director at SBI. By convention, the post of managing director at SBI was only open to deputy managing directors (DMDs) either positioned within the country’s largest bank or the wider SBI-group. 

Rajeev Kumar, secretary of the Department of Financial Services at the Ministry of Finance, said, “Earlier, DMDs of SBI were made eligible to be managing directors in nationalised banks. The government’s thrust to widen top-management talent pool and sharing of experiences across the Public Sector Banks continues.” 

In the last few months, some of DMDs from SBI have been appointed as chief executives and MDs for the public sector banks (PSBs). These recent appointments include Pallab Mahapatra moving to head Central Bank of India, Mrutyunjay Mahapatra moving to Syndicate Bank and Padmaja Chunduru being appointed to lead Indian Bank. 

This had created heartburn among senior executives that had spent years in these PSBs, say banking executives. 

A senior finance sector professional associated with rec­r­uitment for top po­s­itions in banks said that this is a good step. “The exi­sting guys (those who be­c­ome eligible to run for posts) will feel better as they are considered as qualified. It will also expand the pool of people who could compete for posts,” they said. Many of to­day's executive directors at the PSBs were first employed in the 1980s through a compe­ti­ti­ve process, at a time when job opportunities were limited. 

"There is lot of talent in the PSBs beyond SBI. It is just that they are often constrained by the system," the executive said.