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Business News/ Industry / Banking/  Govt modifies selection process for public bank heads
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Govt modifies selection process for public bank heads

Interviews for the appointment of heads of state-run banks will be conducted on 13 and 14 November

G.S. Sandhu, secretary, department of financial services in the ministry of finance says the government hopes to finish the whole process by November-end and issue the appointment letters. Photo: Ramesh Pathania/MintPremium
G.S. Sandhu, secretary, department of financial services in the ministry of finance says the government hopes to finish the whole process by November-end and issue the appointment letters. Photo: Ramesh Pathania/Mint

New Delhi: The government has modified the selection process for the appointment of heads of state-run banks and will conduct interviews for these posts on 13 and 14 November.

Each candidate will have to be independently evaluated by three sub-committees having two members each. The financial services secretary, a deputy governor from the Reserve Bank of India and four independent members will be a part of these sub-committees.

The sub-committees will do an independent review of the candidates, including the candidates’ performance in the last 10 years and provide scores to them—a move that is likely to counter the perception that the appointments are influenced by the financial services secretary.

The scores will then go to the appointment board which includes the RBI governor, along with the financial services secretary and these independent experts. Once the board finalizes the names, they will be sent to the appointments committee of the cabinet after the approval of the finance minister.

“The aim is to ensure a transparent and objective selection procedure," said G.S. Sandhu, secretary, department of financial services in the ministry of finance. “We hope to finish the whole process by November-end and issue the appointment letters," he said.

Earlier this week, the government had scrapped the current selection process put in place by the previous United Progressive Alliance government in the wake of the loan-for-bribe scandal at Syndicate Bank that had led to the arrest of its chairman and managing director (CMD) S.K. Jain. The Central Bureau of Investigation had pointed out that the process followed in the selection process was flawed. Consequently, the government has to fill eight CMD level posts and 14 executive director posts.

A total of 16 candidates will be appearing for interviews for the CMD posts.

State-run banks that are currently operating without CMDs include Punjab National Bank, Syndicate Bank, Oriental Bank of Commerce, Canara Bank, United Bank of India, Indian Overseas Bank and Bank of Baroda. The CMD of Vijaya Bank is set to retire before the end of the current calendar year.

The selection process of executive directors will follow the selection process of CMDs.

On capitalization of state-run banks, Sandhu said that the financial services department will seek an additional 10,000 crore for their recapitalization, over and above the 11,200 crore announced in the July budget. The finance ministry will also soon go to the cabinet to get its nod for the long-term capitalization plan for these banks, including bringing down the government’s stake to 52%.

Sandhu said the government is also contemplating giving state-run banks a say in the appointment of statutory auditors.

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Published: 01 Nov 2014, 12:36 AM IST
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