Finance Ministry suggests extending terms of CEOs, EDs at state-owned banks

The finance ministry has recommended extending the tenure of three chief executive officers and 11 executive directors (ED) of public sector banks, looking to ensure stability and continuity at the lenders during the coronvirus pandemic.

The Department of Financial Services (DFS) has written to the Department of Personnel and Training (DoPT) recommending extension of existing PSB chiefs’ terms before the Banks Board Bureau (BBB) identifies new candidates for the top job.

The letter, written earlier this month, recommended an extension for S S Mallikarjuna Rao, MD and CEO of Punjab National Bank till January 31, 2022, when he will be due for superannuation. Rao’s term as MD and CEO was coming to an end on 18 September this year.

Atul Kumar Goel’s term as MD and CEO of UCO Bank has been recommended for a two-year extension beyond November 1 this year. A.S. Rajeev, MD and CEO of Bank of Maharashtra, has been recommended for an extension of two years beyond December 1.

EDs have also been recommended for extensions for two years, or the age of 60, whichever is earlier.

Shanti Lal Jain, and Ajay K. Khurana, both EDs at Bank of Baroda, have been recommended for two years of extension each. A Manimekhalai, ED at Canara Bank, and P R Rajagopal, ED at Bank of India, are likely to get a two-year extension.

Sanjay Kumar, and Vijay Dube, EDs ot Punjab National Bank, Gopal Singh Gusain, and Manas Ranjan Biswal, both EDs of Union Bank of India, Vikramaditya Singh Khichi, ED of Bank of Baroda, Shenoy Vishwanath Vittal, ED of Indian Bank, Alok Srivastava, ED of Central Bank of India were recommended for extension till their age of superannuation.

The DFS sent these proposals to the Department of Personnel and Training (DoPT), and noted that the proposal “has been approved by the Finance Minister.”

According to sources, the ministry sought extension of the executives from the Appointments Committee of Cabinet (ACC). The proposal has been sent to the Department of Personnel and Training for the same after consultation with Banks Board Bureau (BBB). The final call for extension will be taken by the ACC.

BBB considers the proposal to increase MD and CEO, as well as ED tenure if there is time left to attain 60 years of age. Once finalised, its recommendations will be sent to the Appointments Committee of Cabinet (ACC) for appointment or extension.

The decision comes amidst the government’s efforts in seeking private sector participation for top posts in public sector banks.

For Punjab National Bank, the BBB on June 16, had sought public application for the MD and CEO post.

“Banks Board Bureau invites applications from qualified candidates for the post of Managing Director& Chief Executive Officer (MD& CEO) of Punjab National Bank (PNB) on a full-time basis,” the BBB had said in a notice.

The criteria set was that the applicant should be in the age group of 45 to 57 years in mainstream banking, of which, at least one year has to be at the board level. The compensation offered was in line with the MD and CEO of a large public sector bank.

With the DFS proposal to increase the terms, which is likely to be accepted by the (DoPT), then the private sector participation in government banks will have to wait for a while.