The appointments board's recommendation, along with the finance minister's noting, will now go to the home ministry. In case home minister LK Advani and the prime minister's office (PMO) clear Sinha's recommendations, Verma will become the first State Bank chief to be at the helm of the largest commercial bank in the country even after crossing 60 years.

Till date, only former chairmen DN Ghosh and TR Vardachary have been given a few months' extension beyond 60 years for "technical reasons". However, no chairman has ever been given a full-fledged extension beyond 60 years.

"Sinha recommended a second term for Vermalast week before leaving for Washington," sources said. Verma, who is attending the World Bank meet in Washington, was not available for comment. Senior SBI executives in Mumbai confirmed the development. A source close to the appointments board, under condition of anonymity, said the board is not surprised by the finance minister's remarks on the file.

"The bank is governed by the SBI Act. There is only convention -- as there are no set norms -- as far as the chief's tenure is concerned. Nothing prevents the ministry from keeping Verma at the top slot for another two years," sources said.

However, the PMO may not favour the idea as this will have a ripple effect in the financial sector. Three years ago, Dipankar Basu could not get an extension despite the then finance minister Manmohan Singh's strong recommendation.

In case Sinha's recommendation does not find favour with the PMO, the entire appointment process is likely to be reopened. "If the PMO shoots down Sinha's recommendation, the appointmentsboard will be required to take a fresh look at the entire process. Since the finance minister has rejected the original recommendation of the board, it will not be accepted. We will not be surprised if the ministry opts for an IAS to break the deadlock," sources said.

Going by the original recommendation of the board, Janakiraman was slated to take over as the SBI chairman and GG Vaidya -- who is at present heading SBI associates and subsidiaries in the capacity of a deputy managing director -- is scheduled to head Nabard. Vaidya, Janakiraman's senior as a DMD, retires in October 2000 while Janakirman hangs up his boots in February 2000.

The board also recommended State Bank of Mysore managing director SR Iyer for the post.

Former finance secretary Montek Singh Ahluwalia "interviewed" Vaidya, Janakiraman and Iyer in July. Vaidya's lack of exposure in global banking and banking operations was being held against him. A section of the appointments board felt that Vaidya has excellent exposure in treasuryoperations as he efficiently managed Discount & Finance House of India before taking over as State Bank of Travancore's managing director, but that is not enough to steer the bank to the next millennium.

However, the finance minister is not in favour of supersession at the SBI top slot, sources said. The recommendation for Verma's extension has been interpreted as a strategy to stall the "supersession formula".