In line with the best corporate governance practice, the government has separated the post of chairman and managing director/CEO of public sector banks (PSB).
“Henceforward, in the new appointments of PSBs other than State Bank of India, the chairman will be a part-time board member who would preside over the board meetings and will not be an executive chairman. The procedure for selection of part-time chairman would be announced shortly,” said a finance ministry statement.
Many private sector banks have already separated the posts of chairman and MD/CEO. As early as in 2004-05, the RBI had set up a panel, led by AS Ganguly, to look into separation of the post of chairman and managing director/CEO in banks. The panel then suggested the separation for better corporate governance, following which in 2007, private sector banks implemented it.
Pointing out that due to concentration of powers with CMDs, they tend to dominate board proceedings, the RBI had earlier asked the finance ministry to look into the issue so that the board could be empowered to take independent decisions. The call for separation grew louder with the arrest of Syndicate Bank CMD Jain in August in a bribery case.
The government also appointed MD & CEOs of PSBs, including Indian Overseas Bank (IOB), Oriental Bank of Commerce (OBC), Vijaya Bank and United Bank of India (UBI).
While R Koteeswaran, executive director (ED), Bank of India (BOI), has been appointed as MD & CEO of IOB, Animesh Chauhan, ED (BOI), will head OBC. Kishore Kumar Sansi, who is currently ED (Punjab and Sind Bank) will be the new MD and CEO of Vijaya Bank, while P Srinivas, the present ED of Bank of Baroda (BOB) will be MD & CEO of UBI. The appointments will be for three years or till the date of superannuation, whichever is earlier, the statement said. The appointments were based on the recommendations of Appointments Board chaired by the RBI governor and the Department of Financial Services, ministry of finance.
However, the government did not name a replacement for Syndicate bank CMD SK Jain. “The appointment in Syndicate Bank is still under consideration and would be decided very shortly,” the statement said.
It also said for three large banks — BoB, Punjab National Bank and Canara Bank — the government has decided to go in for a fresh selection procedure with a view to widen the search of candidates. The procedure for this would be announced shortly, the statement said.
The government has not found suitable candidates to head these banks, sources said, adding that private sector candidates will not be ruled out.
The top post in Canara Bank and PNB is vacant since October 2014, while BoB has been without a chief since July 31.
