Bank unions slam move to open top PSB roles to private candidates

UFBU calls the move to allow private candidates for top roles in state-run banks and insurers a de-facto privatisation of leadership in public institutions

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The United Forum of Bank Unions (UFBU) has strongly protested the government’s move to open top-level posts in state-owned financial sector entities — banks and insurance companies — to private sector candidates, terming it “a de facto privatisation” of leadership in statutory public institutions.

 

The orders enabling such appointments were issued without any amendment to the enabling statutes — namely the State Bank of India Act, 1955; the Banking Companies (Acquisition and Transfer of Undertakings) Acts, 1970 and 1980; and the Life Insurance Corporation Act, 1956 — and therefore constitute “a serious legal and constitutional transgression,” UFBU said in a statement.

 

The UFBU, representing nine trade unions of officers and workmen across banks, said the executive orders were issued by the Appointments Committee of the Cabinet (ACC) on October 4, 2025, approving “revised consolidated guidelines” for the appointment of Whole-Time Directors (WTDs), Managing Directors (MDs), Executive Directors (EDs), and Chairpersons in Public Sector Banks (PSBs), including State Bank of India (SBI), and in Public Sector Insurance Companies. 

 

‘PSBs symbolise national trust and public accountability’

 

“Public Sector Banks are not merely financial institutions; they signify national trust, serving every section of society and anchoring financial inclusion. These are statutory and important public financial institutions, and their leadership carries a sovereign and fiduciary responsibility to the people of India, not merely a corporate mandate,” the statement added.

 

UFBU said diluting this statutory responsibility by importing private sector executives risks undermining the banks’ public character, their constitutional accountability, and the public ethos and values that have guided these institutions since inception.

 

Unions flag dilution of transparency and public ethos

 

The forum emphasised that top management positions in public sector banks must reflect their public character, uphold transparent and auditable criteria, and preserve institutional memory built through decades of public service.

 

"By authorising lateral entry of private sector executives into statutory leadership positions, removing APAR-based evaluation, and introducing HR-agency assessments, these guidelines alter the public character, accountability framework, and legislative intent," UFBU said.