New Delhi: The Union government has decided to cap the retirement age of the chairmen of the Indian Institutes of Management (IIMs) at 74, while rejecting a demand to raise the superannuation age of directors to 70 from the present 65. The premier management institutes have been informed about the revised retirement caps. Mint has seen a copy of the rules, expected to be notified on Monday.

The new rules also say an IIM director should be either an Indian citizen or one who is an overseas citizen of India (OCI), essentially keeping out foreign passport holders without an Indian origin link.

“The person proposed to be appointed as director shall be an Indian citizen or an Overseas Citizen of India (OCI)," the IIM rules said. There was no mention of citizenship requirements earlier.

The new citizenship restriction may not come across as progressive for IIMs seeking to expand their global reach and reputation, at least two government officials said, requesting anonymity. To be sure, IIMs have never hired a director who is either not an Indian citizen or an OCI; however, there were talks that IIMs may actually open up their top post to anyone from anywhere, in the spirit of the IIM Act that gives them unmatched freedom.

On the retirement age, one of the two officials cited above said while capping the chairman’s age at 74 is a positive move as it factors in the efficiency of an individual, raising the retirement age of directors may have helped grow the pool of experienced candidates for selection.

“The tenure of Chairperson shall automatically come to an end, on completion of 74 years of age or completion of four years as Chairperson, whichever is earlier," the rules said.

A human resource development ministry spokesperson declined to comment.

An IIM director, who spoke on condition of anonymity, said during inter-ministerial consultation, the law ministry and the department of personnel said there needs to be a debate on the retirement age at universities, at IITs and at IIMs, and advised that for the time being, the HRD ministry should desist from increasing the retirement age of IIMs.

The rules, once notified, will help implement the IIM Act and empower IIMs with academic, financial and administrative freedom.

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