Reddy panel against SBI officials heading other PSBs

The top-level committee on the appointment of public-sector banks’ (PSB) chairman and managing directors (CMD) headed by Reserve Bank o...

The top-level committee on the appointment of public-sector banks’ (PSB) chairman and managing directors (CMD) headed by Reserve Bank of India (RBI) governor Y.V. Reddy has ruled out further accommodation of State Bank of India (SBI) officials for top posts of other such banks.

The Reddy committee, which met last week in the city had taken a string of decisions on the appointment of CMDs and executive directors (ED) of state-owned banks. Banking secretary-Ministry of Finance, N Sisodia and other top finance ministry officials were also present at the meeting. The committee was of the view that since SBI does not allow other bankers to occupy its top positions, the same logic should also be applicable to the rest of the state-owned banking industry.

The decision is a significant one as it comes on the backdrop of not having sufficient number of EDs (on the basis of the existing guidelines) to fill up the large numbers of CMD posts, falling vacant in the state-owned banks next calendar.

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On the other hand, there is a certain level of stagnancy among senior SBI officials at the level of deputy managing directors. The bank’s current chairman A.K. Purwar, retires in mid-2006. So there are many deputy managing directors who could have been offered the posts of chairman-cum-managing director outside SBI as there are 10 retiring CMDs. The Reddy committee has also taken a policy decision to appoint CMDs of small banks like Vijaya Bank, Dena Bank, Allahabad Bank, Syndicate Bank and OBC as CMDs of bigger banks in case of vacancies.

Though such a shift was happening as a matter of convention, it has to be effected as a mater of policy now. These decisions have to go to the appointments committee of the Cabinet for final approval.