Public sector banks, which used to see their top posts lying vacant for months, have started experiencing a change. The government has now decided to appoint the chairman and managing director (CMD) of a public sector bank at least one month before the post falls vacant. The move has been backed by Finance Minister Pranab Mukherjee.
On Friday, the government notified the appointment of TM Bhasin as CMD of Chennai-headquartered Indian Bank. Bhasin, who is United Bank of India’s executive director, will take over from MS Sundararajan, who is due to retire on March 31.
Last month, the government notified the appointment of Bhaskar Sen as CMD of Kolkata-based United Bank of India (UBI) from March 1, as the top post will fall vacant at February-end. At present, Sen is an executive director of Dena Bank.
The move comes at a time when 10 bank chiefs are due to retire this year. The government has had to do some advance planning on the matter and has kept a panel of bank executive directors (EDs) ready to be appointed before an incumbent’s retirement.
The appointment process for top posts in government-owned banks is a lengthy process that starts with an interview by a selection panel. The candidate selected by the panel is sent to the finance minister for approval and requires clearance from the Cabinet’s appointments committee, headed by the prime minister.
Sources said the finance ministry had decided to revamp the process following delays in the appointment of chiefs of Punjab National Bank (PNB), Bank of India, Export and Import Bank (Exim Bank) of India and National Housing Bank (NHB).
While PNB remained headless for several months after KC Chakrabarty’s appointment as RBI deputy governor, the hunt for chiefs of Exim Bank and NHB has continued for several months. Even in case of Bank of India, where TS Narayanasami retired last year, the Mumbai-headquartered lender did not get a CMD for at least two months.
Between April and December this year, nine more state-run banks’ chiefs will hang their boots. The finance ministry has already conducted interviews of EDs for the CMD posts and also for ED posts. While 18 EDs were interviewed for being promoted to the post of CMDs, around 40 general managers were interviewed for EDs job.
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