After completing the selection of executive directors, the Banks Board Bureau will next week begin the process for identifying suitable candidates for the post of managing directors in nearly a dozen state-owned banks.
This is the first time in years that deputy managing directors of the country's largest lender, State Bank of India, will be interviewed for the post of MDs of the nationalised bank.
The BBB is an advisory body formed by the government for selection of candidates for top level board appointments. They will interview as many as 34 executive directors, deputy managing directors and other eligible senior officials.
Financial Services Secretary Rajiv Kumar said that the BBB, headed by former Secretary Department of Personnel and Training B P Sharma, has fixed an interview schedule. "As per the schedule interview will be held over three days beginning June 28," he said. There are a few vacancies at the MD level and few more will be created during course of the current fiscal, he added, without giving any further details.
As per the convention, the MD’s post at the Punjab & Sind Bank has always been held by persons belonging to a particular community. Even the first non-executive chairman of the bank is from the same community.
In addition, the government has made interim arrangement in IDBI Bank Ltd. by giving additional charge to B Sriram, one of the MDs of SBI. Last week, Sriram was appointed as the MD and CEO of IDBI Bank for a temporary period of three months in place of M K Jain, who moved to the RBI as Deputy Governor.
Earlier this month, the BBB recommended 22 general managers to be elevated as executive directors at the various public sector banks. This was the first major exercise undertaken by the BBB, headed by a newly appointed chairman. Sharma was appointed head of the panel in April after former CAG Vinod Rai’s completed his two-year term.
The executive directors who have completed a year and have two years remaining will be eligible for the MD and CEO posts, a senior bank official said. The cut-off date for application was April 1, 2018.
Majority of the banks, where top level vacancies are to be filled, are under Prompt Corrective Action framework of the Reserve Bank of India. For example, the RBI had recently imposed lending and deposit restrictions on Dena Bank and Allahabad Bank.
The RBI asked both these banks, which are already under the PCA mechanism, to restrict expansion of risk weighted average and reduce exposure to un-rated and high-risk advances.
As many as 11 banks, out of the 21 state-owned banks are under the PCA of the Reserve Bank of India because of their weak financials. The 11 banks on the RBI's watchlist are Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, UCO Bank, Bank of India, Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce, Dena Bank and Bank of Maharashtra.