NDA government to make amends in the selection procedure to appoint CMDs and other top officials of PSBs
Shishir Tripathi | November 3, 2014
In order to curb the corruption plaguing the public sector banks (PSBs), the NDA government is gearing up to make necessary amends in the selection procedures for appointing chairman and managing directors (CMDs) and other top officials of PSBs.
According to the new rules adopted by the government, the appointment of a CMD will be made through three screening committees. The appointment has to be cleared by all the three committees which will consist of two members each.
Further, the government is likely to ensure prior vigilance clearance for the candidates, and might avoid a fixed tenure for CMDs.
The new selection process is said to be more transparent with little scope for manipulation, as there would be a considerable number of external members and sub-committees.
According to the finance ministry, interviews for eight posts of CMDs and 14 executive directors (EDs) will be held on November 13 and 14, respectively. The final appointments would be made by the end of the month. This means that the wait for banks such as United Bank of India (UBI), whose CMD Archana Bhargava vacated office eight months ago, would end soon.
With the arrest of the Syndicate bank CMD SK Jain in August in an alleged bribery case and, allegations of corruption against officials of other banks, there is an increased emphasis on the need for serious reforms in the appointments process.
Recently, the Modi government scrapped the selection procedure adopted till now in appointing CMDs and EDs at PSBs. The government decided that a fresh process for selection would have to be implemented for filling the existing vacancies wherein the RBI governor or his nominee, of the rank of deputy governor, should be a part of the process.
While delay in the appointment of the CMDs was a major concern, a bigger one was to ensure that stringent procedures are followed in their appointment to ensure that no tainted candidate was appointed.
Headed by RBI governor Raghuram Rajan, the new interview panel would also have an RBI deputy governor and department of financial services secretary, along with other members.
At present, six PSBs are functioning without CMDs: Canara Bank, Syndicate Bank, United Bank of India, Oriental Bank of Commerce, Bank of Baroda and Indian Overseas Bank. Further, CMDs of Vijaya Bank, Punjab National Bank and Allahabad Bank are due to retire within six months.
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