In a major policy decision, the government has permitted executive directors (EDs) of nationalised banks to be selected as managing directors of the country's largest lender State Bank of India (SBI).
Moving away from the tradition, deputy managing directors (DMDs) of SBI were appointed managing directors in several nationalised banks earlier this year. Now, the government has allowed vice versa, by making EDs eligible to become MDs of SBI.
Traditionally, nationalised banks' EDs were elevated as MD, while DMDs were made MDs of SBI. There are four MDs in SBI and a chairman heads the bank.
"EDs of nationalised banks made eligible for selection as MD, SBI. Earlier, DMDs of SBI were made eligible to be MD in nationalised banks. Govt's thrust to widen top-management talent pool and sharing of experience across PSBs continues," Financial Services Secretary Rajiv Kumar said in a tweet.
Out of the total 21 public sector banks, 19 are nationalised lenders while SBI and IDBI Bank are governed by different Acts.
Earlier this year, Mrutyunjay Mahapatra and Padmaja Chundru -- both DMDs in SBI -- were appointed as managing director and chief executive officer of Syndicate Bank and Indian Bank.
Three other DMDs of SBI -- Pallav Mohapatra, J Packirisamy and Karnam Shekhar -- were also appointed as MD and CEO of Central Bank of India, Andhra Bank and Dena Bank, respectively.