Hunt for public sector bank CEOs: Eight EDs from govt banks apply for top job

Experts say revision in eligibility criteria defeats the purpose of of opening up the vacancies to private sector players

Eight executive directors (EDs) of public sector banks (PSBs) have found themselves eligible to apply for the post of managing director & chief executive officer (MD & CEO) at five large public sector banks, the recruitment for which was announced by the government.  These candidates became eligible after the government relaxed one eligibility criterion — that the maximum age of the candidate could be 57 instead of 55, as prescribed earlier.

The Bharatiya Janata Party-led government had cancelled the proposed appointments of the previous United Progressive Alliance dispensation, and said it was open to hiring candidates from the private sector for the top job in public sector banks. The government then decided to split the chairman and managing director (CMD)'s post into non-executive chairman and MD & CEO posts and then advertised about recruiting for the latter.

The ministry had stipulated 55 as the maximum age (the minimum age being 45) to be eligible for the post of MD & CEO. This had made existing EDs from state-run bank ineligible as all of them were above 55.  In addition, candidates were supposed to have board-level experience.

However, not many suitable candidates were found applying, and as a result the government, in the last week of April, revised the upper age limit to 57.

According to sources, many candidates from lower ranks, who are on the board of public sector banks as workmen employee directors, had also applied. In addition, CEOs of some regional rural banks have also applied.

Sources indicate about 48 candidates have applied for five posts for which recruitment has been announced. These banks are Bank of Baroda (BoB), Canara Bank, Punjab National Bank (PNB), Bank of India and IDBI Bank. While the top posts at BoB, Canara and PNB are already vacant, Bank of India’s present chief will retire by the end of the month, while IDBI Bank’s top post will fall vacant in June.

Sources said the government might call for interview only shortlisted canidates. Experts said the revision in the eligibility criteria to make public sector bank EDs eligible defeats the purpose of opening up the vacancy to private sector players.

“It is going back to the old system where existing executive directors of public sector banks are given the top job in public sector banks,” said a senior banker.

Banking industry officials said the government needs to fast-track the appointment process as the top post at large banks such as BoB and PNB have been vacant for quite some time. In addition, the government is yet to appoint a chairman in many banks.

A panel headed by RBI Governor Raghuram Rajan has been appointed to select chairmen at public sector banks.