Govt scraps selection of CMDs for 6 banks, initiates probe

Now, the selection would be done by a panel necessarily comprising of RBI Governor or his nominee.

Government today scrapped the selection of six PSU bank heads during UPA tenure following a high-level panel finding irregularities in the process followed.

The probe into the selections to banks like Bank of Baroda and Canara Bank followed arrest and termination of Syndicate Bank CMD S K Jain for alleged graft.

A Finance Ministry statement said future vacancies of chairman and managing directors (CMDs) as well as executive directors of PSU banks will now be filled through a new selection process.

A panel headed by RBI Governor and including Financial Services Secretary, during the previous UPA regime had shortlisted Chairman and Managing Directors for Bank of Baroda, Canara Bank, Indian Overseas Bank, Oriental Bank of Commerce, United Bank and Vijaya Bank.

The selections made by the panel had been sent to the Finance Ministry for ratification by the Appointments Committee of the Cabinet (ACC) but the government decided to scrap the entire selection process and fill these vacancies as well as two others, including Syndicate Bank, through fresh selection process involving RBI Governor or his nominee.

Following the arrest of Jain, the ministry had set up a committee comprising Expenditure Secretary, RBI Governor and Secretary School Education to examine the selections to six PSBs.

"After receipt of the report of the Committee, the government has decided to cancel the current selection process of CMDs/EDs of Public Sector Banks (PSBs)," the statement said.

To fill up these 8 vacancies of CMDs along with those of 14 executive directors, the government decided the selection would be done by a panel necessarily comprising of RBI Governor or his nominee.