In the second round of interviews, the finance ministry on Tuesday interviewed State Bank of India (SBI) deputy managing directors (DMDs) Diwakar Gupta and A Krishna Kumar for the post of managing director. SBI has two managing directors and one of the posts has been vacant ever since S Bhattacharya retired in October 2010. OP Bhatt chairman, SBI, is set to retire in March 2011 and will be succeeded by SBI?s next managing director, whose appointment is due shortly.

?This is the second round of interviews. Diwakar Gupta and A Krishna Kumar are frontrunners for the post of MD which has been vacant since October 31, 2010, after S Bhattacharya retired,?? said a source, adding that Gupta, credited with turning around SBI Cards, probably has an edge. In the first round, the finance ministry had met all four DMDs, namely, Diwakar Gupta, A Krishna Kumar, Hemant Contractor and Pratip Chaudhuri

?It would seem that Bhatt has been grooming Diwakar Gupta for the job,?? said senior officials from SBI. All the four DMDs have three years of service remaining, the youngest being A Krishna Kumar, in charge of information technology portfolio and Hemant Contractor,born in April 1954 being the senior- most.

Traditionally, the country?s largest bank has had two MDs. However, the recent amendment to the SBI Act empowers the government to appoint four MDs. Since Bhattacharya retired in October, R Sridharan is the only MD and is set to retire in March 2011. ?The government would appoint three managing directors,?? said a senior SBI official.

Simultaneously, sources in the know of development also state that the government is close to clearing the rights issue of the bank as well. “The size of the issue is expected to be anywhere between Rs18,000 and 21,000 crore. They would subscribe to the rights issue through the bond route,?? said a senior SBI official.

?In 2008 we raised about Rs 16,000 crore through a rights issue, since then our balance sheet has grown and hence the fund requirement has also increased. This capital raising would see us through for atleast the next five years,?? the official added. “Additionally, we can also tap the bonds market for any further fund requirement. We will also come out with a retail bond issue this quarter and the coupon will be over 9%,?? the same official added.