Work piles up at Sebi as 2 whole-time member posts continue to lie vacant

The Appointments Committee of the Cabinet (ACC) approved the appointment of Ashwani Bhatia as a WTM in March, however, his joining has been delayed.

Two whole-time member (WTM) positions at the Securities and Exchange Board of India (Sebi) continue to lie vacant, leading to a pile up of workload at the capital market regulator.

The Appointments Committee of the Cabinet (ACC) approved the appointment of Ashwani Bhatia, managing director of State Bank of India (SBI), as a WTM in March. However, his joining has been delayed due to procedural issues. Meanwhile, the government is yet to take a final call on the appointment of the fourth member.

The securities and commodities regulator has been forced to function with just two WTMs — SK Mohanty and Ananta Barua — after the tenures of G Mahalingam and Madhabi Puri Buch ended late last year. Puri Buch took charge as chairperson of Sebi in March.

Sources said Bhatia has resigned from his posts at SBI. However, his resignation is yet to be processed, leading to the delay in joining Sebi. People in the know said Bhatia’s appointment formalities to join Sebi are expected to be completed soon.

“Sometimes the process can take time as the controlling authority of the respective cadre is required to give a no-objection for the selected candidate,” a government source told Business Standard. He explained that the process can take a few weeks as a lot of inter-departmental clearances are required.

Bhatia has been appointed for an initial period of three years from the date of assuming charge. In August 2020, he was elevated as MD of SBI. Before that, he was working as the MD and chief executive officer of SBI Mutual Fund.

Legal experts say keeping key posts vacant at Sebi can impede market development and makes it challenging to carry out key functions such as enforcement action.

In January, at least seven candidates were shortlisted to fill the post of two WTMs at Sebi. Their interviews were also conducted that month. According to sour­ces, the shortlisted candidates included three Sebi executive directors, senior bankers, an additi­onal secretary in the finance ministry, and one mem­ber each from the Insurance Regul­atory Development Authority (Irdai) and the Pension Fund Regulatory and Development Authority (PFRDA).

Sources say the government plans to interview more candidates for the fourth WTM position.

For the appointment of the WTM post at Sebi, the candidates are shortlisted by the Financial Sector Regulatory Appointments Search Committee (FSRASC), headed by the Cabinet Secretary.

In the past, the government has had problems appointing IAS officers for the WTM post. This is because the government has made it mandatory for IAS officers to resign from service before they take up the WTM job at Sebi.  Most young IAS officers are only willing to take up the job on deputation so that they can again go back to public service after their WTM tenure ends, which is typically for three or five years.