New State Bank of India (SBI) chairman Pratip Chaudhuri’s first interaction with the media was interesting in many ways. Chaudhuri did not dodge any question on the controversy surrounding the bank’s unwillingness to make extra provisions for its special home loans, which the regulator has been insisting on, and stoutly defended his predecessor’s decision.

Also read | Tamal Bandyopadhyay’s earlier columns

At the same time, he did say that if the bank fails to convince the regulator, it would set aside money for such loans. He also admitted the “stress" on the bank’s quality of assets and promised to address this.

At the press conference, Chaudhuri was accompanied by his three managing directors (MDs), two of who were appointed along with him on Thursday. The fourth MD, Diwakar Gupta, was away in Delhi. In fact, Chaudhuri, too, was in Delhi on the previous day and rushed to the bank’s local office to take over as chairman late evening after the government notified the appointment.

Why did the government take a week to do so? After all, SBI is the nation’s largest lender and accounts for about a quarter of the banking industry, and the government owns its majority stake. Shouldn’t the SBI chairman’s appointment be on top of the government’s priority list?

Senior executives of the bank are not surprised at the delay as this has been the tradition. This is not the first time that an MD of the bank (R. Sridharan, in this case) held the additional charge of chairman till the government named the chief. Chaudhuri’s predecessor Bhatt, too, had to wait for a month to move into the corner room on the 18th floor of the bank’s corporate office in Mumbai’s business district Nariman Point. Then MD T.S. Bhattacharya oversaw the bank’s operations for a month even though the government did not formally appoint him as interim chairman. In mid-1990s, another MD, M.K. Sinha, held fort for a month as acting chairman.

SBI executives do not read too much into a few weeks delay in the appointment of the chief. After all, an insider, who always has over three decades of experience working with the bank, takes over; and a few months delay doesn’t damage the business strategies. (In past 40 years, only twice it has appointed outsiders as chairmen—D.N. Ghosh and M.N. Goiporia).

But these few weeks are typically characterized by hectic lobbying, and counter-lobbying, by corporate houses and even politicians at the finance ministry and selective leaks in media on procedural lapses in the appointment process or not-so-happy past records of the prospective candidates. One can also feel the palpable tension among the senior executives of the bank in the fray for the top job till the name is announced. After all, unlike cricket, where an individual player can overshadow the captain (Sachin Tendulkar’s profile is much larger than his captain M.S. Dhoni’s), the chairman is the face of SBI and the managing directors—however brilliant bankers they are—play second fiddle.

Theoretically, the top job in SBI doesn’t necessarily go to the senior-most executive. A panel of experts from the regulator, bureaucracy and management professionals form an appointments’ committee that interviews senior executives and recommends names for the chairman’s post. After it gets the finance ministry’s approval, the Prime Minister’s Office puts its seal on it. An executive with a residual service of less than two years is not considered for the post.

There was a lot of drama in the run up to Bhatt’s appointment in 2006. His predecessor A.K. Purwar retired on 31 May and five executives of the rank of deputy managing directors (DMDs) including Bhatt and Yogesh Agarwal—both heading two associate banks—were interviewed by the panel months ahead of Purwar’s retirement.

While the panel recommended Bhatt’s name for the post, a section of the banking industry pitched for Agarwal as he was the most senior of the lot. Although all contenders joined the bank on the same date and enjoyed equal seniority till they were made chief general managers, Agarwal was the first to be made a DMD (the chief of an associate bank enjoys the rank of a DMD). Almost seven months after the interview, Bhatt was selected for the job. Meanwhile, an MD’s post remained vacant for four months.

This time around, the scene was less complex, although the time taken by the government was even longer. In April 2010, the first round of interviews took place for the post of MDs. Through an amendment to the SBI Act, the government has doubled the number of MD positions in the bank to four and the first interview was to identify two new MDs. In contention were four DMDs—Hemant Contractor, A. Krishna Kumar, Gupta and Chaudhuri. The exercise was repeated in October when the bank’s MD Sanjay Bhattacharya retired, leaving behind lone MD R. Sridharan and three vacant MD positions.

Ideally, one of the four executives in the fray should have got Bhattacharya’s job and, subsequently, got promoted to the chairman’s post as Sridharan does not have two years of residual service, an essential prerequisite for the chairman’s post. But the government took time to make up its mind, and the four gentlemen had to undergo yet another round of interview in December—this time for the chairman’s post as well. And, after keeping an MD’s post vacant for five months and the chairman’s post for a week, the government on Thursday named the chairman and three MDs to fill all vacancies.

One can understand that unlike private sector, in public sector culture announcing the name the CEO months in advance and grooming the person is not easy; but the least one can expect is appointment of senior executives in time, at least in SBI, the nation’s largest lender, which also has a base of at least 700,000 investors.

Tamal Bandyopadhyay keeps a close eye on all things banking from his perch as Mint’s deputy managing editor in Mumbai. Please email your comments to