The Indian Banks’ Association (IBA) may elect State Bank of India (SBI) chairman and managing director Challa Sreenivasulu Setty as its next chairman, sources told FE. The annual general meeting of the top lobby group of the banking sector, pending since September 2024, will be held later this month to elect the new chairman for 2025-26.
Former managing director and CEO of Punjab National Bank, AK Goel, who was the IBA chairman from November 2021 to March 2024, is likely to make a return as the chief executive.
Goel’s name was recently agreed upon by the managing committee of the IBA. It will be formalised once finance minister Nirmala Sitharaman gives her nod.
“There is a strong undercurrent among members, and they are not happy with the way it was being run. Given the crisis of trust, Setty could be selected as the next chairman,” sources said. Setty is understood to be fine with this arrangement.
Despite SBI being the largest funds contributor to the IBA, the lobby group, since its inception from 1946, did have only 4-5 chairmen from the largest bank. That’s largely because the senior-most managing director/chairman of public sector banks is selected as the IBA chief by convention. Unlike other PSBs, SBI functions under a different statute, with the chairman holding the executive post. As a result, SBI’s turn comes after long gaps.
The retirement age for the SBI chairperson is 63, and that of PSB MDs is 60. Bank of India MD Rajneesh Karnatak is currently the senior-most MD among PSB chiefs.
At present, Central Bank’s MV Rao is serving as the IBA chairman while Setty and City Union’s Kamakodi are deputy chairmen.
The chief executive position has been lying vacant since September 2024 after the nearly-five-year term of Sunil Mehta (former MD of PNB) completed. The chief executive runs the day-to-day affairs of the IBA, communicates with the finance ministry and the industry. The post of the chairman, the face of the organisation, is held by a serving CMD/MD.
There were murmurs of dissent among a section of bankers, including private lenders, as the chairman got overshadowed during Mehta’s tenure as the chief executive. Even as a section wanted to push Mehta’s tenure beyond 65 years of age, the maximum permitted under IBA rules, the move was nixed after complaints to higher-ups in the government, sources said.
There was a buzz in the IBA when the group was not invited for pre-Budget consultations with the finance minister. A couple of private bankers though did attend those meetings.