Clearing air over the issue whether officials from banks other than the State Bank of India (SBI) can be appointed at the top posts of the bank, OP Bhatt, chairman, SBI has said the government is free to bring an outsider to head the bank.

?SBI internally decides the appointment of officials till the level of deputy managing directors (DMD). Both the managing directors (MDs) and chairman are appointed by the government. The government is free to bring in outsider to occupy these posts,?? Bhatt told FE.

Bhatt?s statement assumes importance considering the recent controversy where the government under pressure from the public sector bankers, changed its stand to include names of top SBI officials to participate in the interview for selecting the chiefs of 10 public sector banks.

The public sector bankers said unless they were allowed to occupy top positions of SBI, no official from the country?s largest public sector bank should be allowed to compete for the posts of PSB chiefs.

The ministry of finance in fact had sent letters of regret to senior officials from SBI whose names were dropped at the last moment.

It is worth mentioning that Bhatt after a five-year stint will retire in March 2011. FE had last week reported that the government had to drop names of some senior SBI officials (at the DMD level) along with the senior officials of some other state-owned financial institutions like National Bank for Agriculture and Rural Development (Nabard) , Exim Bank, National Housing Bank (NHB) at the last moment after initially inviting them for an interview scheduled on Februay 17.

The interview was conducted by a panel headed by R Gopalan, secretary, financial services, ministry of finance.

Interestingly, among two MDs of SBI and 14 DMDs, 10 will either be retiring before Bhatt or do not have required two years residual services to be considered for the top post of SBI.

Sources point out under this circumstance where only four DMDs are eligible ,the government may yield to the wishes of the public sector bankers who can be considered for the top posts at the SBI. ?This can successfully set a new trend,? said a PSB chief.

At earlier occasions, top officials of SBI have been appointed as the chiefs of various public sector banks (PSBs). Recently, Yogesh Agarwal who was one of the MDs at SBI was shifted to IDBI Bank as its CMD.