NEW DELHI: The government on Wednesday bi-furcated the post of chairman and managing director and CEOs of PSU banks for greater supervision and accountability.
With the new arrangement, it will be for the first time that PSU banks will have a non-executive chairman who will provide operational responsibility to the managing director and the CEOs of the respective banks.
“The procedure for selection of part-time Chairman would be announced shortly,” said a Finance Ministry statement.
According to the Finance Ministry, the appointments will be for three years or till the date of superannuation whichever is earlier. The ministry, however, said the current structure at country's largest lender State Bank of India which is headed by a Chairman and assisted by several Managing Directors, will continue.
The statement also mentions that, henceforth, at public sector banks (PSBs) other than SBI, the Chairman will be a part time board member, who would preside over the board meetings and will not be an executive chairman.
Meanwhile the government has cleared the appointments of R Koteeswaran, Executive Director, Bank of India who has now been appointed as MD and CEO of Indian Overseas Bank (IOB), Animesh Chauhan, ED (BOI), will head Oriental Bank of Commerce (OBC). While Kishore Kumar Sansi, who is currently ED (Punjab and Sind Bank) will be the new MD and CEO of Vijaya Bank, while P Srinivas moves from Bank of Baroda (BoB) to United Bank of India as MD and CEO.
The government is yet to name a replacement for Syndicate bank CMD S K Jain, who was suspended following his arrest in an alleged graft case.
“The appointment in one more bank — Syndicate Bank is still under consideration of the government and it would be decided very shortly,” the Finance Ministry said in the statement.
To look into the possibility of splitting the two posts the RBI had set up a committee under the chairmanship of A S Ganguly in 2004-05 to study the issue of bifurcation of CMD post in banks. The panel had recommended the bifurcation. Private sector banks in 2007 implemented this recommendations.
Earlier, bifurcation of the CMD's post was also suggested by RBI to the Finance Ministry. The apex bank had contented that CMDs of public sector banks enjoy absolute power along with boards.
The apex bank had also said CMDs often dominate the board during their tenure and therefore it also recommended that the post of CMDs be separated to empower the board.
To find talent the government is also considering to look for senior officials from outside the ambit of PSU banks and is also looking at worthy private sector banker to fill up the vacancies.
CMDs of PSU banks were so far selected from public sector banks only.
The Finance Ministry said the appointments were made based on the recommendations of Appointments Board chaired by the Reserve Bank of India Governor.