9 names for public sector bank CMD posts scrapped
Moneylife Digital Team 28 October 2014

The government has scrapped all the nine names in two panels headed by RBI Governor Raghuram Rajan have been scrapped, a new appointment process to be drafted.


The Ministry of Finance (MoF), announced yesterday, that 9 prospective appointtees to CMDs that were put together to head various public sector banks, have been scrapped. This was done following a report by a committee the Government constituted, consisting of the Secretary (Expenditure), Secretary (School Education) and Governor, Reserve Bank of India (RBI), among others.


These appointees were sent for clearance to the MoF, to head Bank of Baroda, Canara Bank, Indian Overseas Bank, Oriental Bank of Commerce, United Bank and Vijaya Bank.


“After receipt of the report of the Committee, the Government has decided to cancel the current selection process of CMDs/EDs of Public Sector Banks (PSBs). As a result, eight posts of CMDs and fourteen posts of EDs would require to be filled-up de novo,” the MoF's release said.


The issue of corruption at the head of public sector banks has come up time and again, most notably when the Syndicate Bank chairman and managing directo, SK Jain was arrested on charges of corruption. Again, rising NPAs and indiscriminate lending has not inspired confidence in bank heads.


The MoF is looking at this action with the objective of restoring confidence in the banks and their functioning. “The Government has decided that a fresh process for selection would have to be implemented for filling-up these existing vacancies wherein the Governor, RBI or his nominee of the rank of Deputy Governor should be a part of the selection process. The Government would fill-up all these vacancies expeditiously. The Government has also decided to finalise a new process for selection of CMDs/EDs for all future vacancies,” the MoF statement said.


CMD posts have been lying vacant for a long time now and the government has promised to fill up these posts, of 8 CMDs and 14 Executive Directors, expeditiously.

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