Longer tenures likely for bank chiefs

The Appointments Committee of Cabinet has asked the finance ministry to work out a fresh set of guidelines for appointment of nationalised bank chiefs to ensure that they get a tenure of three-five years.

The ministry has been asked to prepare the guidelines over the next two months and ensure that candidates with unblemished records are only shortlisted.

The move to have a long tenure for bank chiefs is Prime Minister Manmohan Singh's idea, sources said. The proposal, if it goes through, would mean that a large number of executive directors would retire in their present posts and their juniors would supersede them for the top jobs.

A large number of bank chiefs, including Punjab National Bank chairman and managing director SS Kohli, Bank of Baroda's PS Shenoy, Oriental Bank of Commerce's BD Narang and Bank of India's O Venugopal, are scheduled to retire next year.

Bankers were, however, of the opinion that the move would help in planning and implementing long term policies. The average tenure of a bank executive director is around one-and-a-half to two years and some bank chiefs get a tenure of less than two years.

The new rules are expected to be operationalised during the next round of appointments. The finance ministry has proposed to move Corporation Bank chairman and managing director K Cherian Verghese to Union Bank of India. The post has been lying valid since V Leeladhar moved over as deputy governor Reserve Bank of India.

Small Industries Development Bank of India (Sidbi) chief VK Chopra is expected to replace Verghese at Corporation Bank. The finance ministry has proposed to elevate Sidbi deputy managing director N Balasubramanian has been recommended for the post of Sidbi chairman and managing director.

National Housing Bank chairman V Sridhar is expected to move to Uco Bank while VP Shetty will replace RV Shastri in Canara Bank. Shastri is scheduled to superannuate shortly.