Vaidya will operate as managing director from December 1, 1998, and take over as chairman on February 1, 1999, when new chairman MP Radhakrishnan hangs up his boots.

Vaidya will be at the bank's helm for 19 months till October 31, 2000.

Vaidya's stint as managing director will last for two months. Radhakrishnan will also have an identical tenure as the chairman of the country's largest commercial bank.

"Vaidya has stepped in former managing director OP Sethia's shoes who had retired on October 31. With the elevation of Radhakrishnan as chairman of the bank, one more managing director post has become vacant. Bhattacharjee could have been promoted as he also has a residual service of two months," SBI sources said.

When contacted at his residence, Bhattacharjee refused to comment on theissue. Sources close to him said he has not sought premature retirement and merely gone on leave. In his absence, the CFO's job will be done by chief credit officer and deputy managing director V Janakiraman who was one of the contenders for the chairman's post.

Former finance secretary Montek Singh Ahluwalia had "interviewed" Vaidya, Janakiraman and Bank of Mysore managing director SR Iyer in August for the top job in the State Bank. With Vaidya's appointment as chairman, Janakiraman and Iyer will be made managing directors in January-end, sources said.

"By appointing Radhakrishnan as chairman for two months, the government has respected his seniority. However, that has not been the case with Bhattacharjee. The government should not have different set of rules for different people," a senior SBI executive said.

While Janakirman will now look after Bhattacharjee's portfolio, another managing director (international operations) DP Roy will hold the additional charge of associate banks and subsidiaries.Till Monday, Vaidya was DMD in charge of associate banks and subsidiaries.

Corporate development officer and DMD BM Bhide also retired on November 30. Y Radhakrishanan, another DMD, has taken over his portfolio.