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In a surprising move, the government has opened senior management positions in public sector banks (PSBs), including the country’s largest lender State Bank of India (SBI), to private sector candidates.

Out of four positions of Managing Director in SBI, one position has been opened for private sector candidates and persons working in public sector financial institutions, PTI reported. 

So far, all MD and chairman positions have been filled by internal candidates. As per the revised appointment guidelines, one MD position will now be available to the private sector. Similarly, the revised guidelines also permitted private sector candidates to appear for the selection process of executive director (ED) in PSBs.

Besides SBI, there are 11 public sector banks, including Punjab National Bank, Bank of Baroda, Canara Bank, Union Bank of India and Bank of India.

According to revised guidelines issued by the Appointments Committee of the Cabinet, candidates must have a minimum of 21 years of experience with at least 15 years of banking experience and at least 2 years at the bank board level, as far as private sector candidates are concerned. 

Candidates eligible under the public sector position would also be eligible to apply for such vacancies, it said.

From the date of coming into force of these guidelines, it said, the first vacancy of MD, SBI, would be treated as open. Subsequent vacancies, arising after filling of the first vacancy, would be filled by eligible candidates holding positions in PSBs, it added.   With regard to EDs in nationalised banks, it said one position in a bank would be open for all the eligible candidates, including private sector candidates. There are four EDs in large nationalised banks, while two positions in small lenders. 

For private candidates, it said, the person should have a minimum of 18 years of experience, with 12 years in banking, including 3 years at the highest level below the board level.

The officer of the nationalised banks with a combined service of four years at the Chief General Manager and General Manager level till FY2027-28. Afterwards, the eligibility condition will be Chief General Manager with two years of service, it added. Candidates holding the post of (CVO will not be eligible to be considered for appointment to the post. 

Unions oppose govt move

United Forum of Bank Unions (UFBU), an umbrella organisation of nine unions, on Friday registered a strong protest against the government decision to open top positions in PSU banks to candidates from the private sector.  The guidelines issued without any amendment to the enabling statutes constitute a serious legal and constitutional transgression, UFBU said in a statement.  UFBU has demanded that all revised ACC Guidelines in this regard should be kept in abeyance with immediate effect pending a comprehensive review.  It also demanded the establishment of a joint stakeholder committee comprising DFS, RBI, FSIB, UFBU, and independent jurists to review leadership appointment frameworks for all PSBs and SBI.