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Kolkata: State Bank of India, or SBI, the largest bank in India that has a total customer base in excess of 50 crore which is bigger than the combined total population of the US and Russia, is in the eye of a major reform step by the government. Reports indicate that the Centre has decided to throw open the position of managing director of SBI for candidates from the private sector. Needless to say, this will be a first in the public sector banking industry in the country. The move has been designed to attract talent from private as well as public sector institutions, who could increase professionalism and accountability in public sector banks.
This proposal signals a willingness of the government to overhaul the selection process for top positions such as CEO, MD, and executive directors in public financial institutions. It is seen as an initiative of the government to promote transparency and competition at the apex of the banking sector institutions. Media reports have said that the Appointments Committee of the Cabinet has given its nod to the guidelines for the appointment of wholetime directors, CEOs, MD etc in public sector banks and public sector insurance companies.
According to the new proposal anyone from the private sector can present himself/herself for the MD;s position of the State Bank of India. The eligibility criteria contains a minimum of 21 years of professional experience, of which at least 15 ears should be in banking. None who hasn't worked at the board level of a bank for at least two years, or at the highest level just below the board level for three years, need apply for this position.
The responsibility of recommending candidates for top financial positions will be handled by the Financial Services Institutions Bureau. It has been suitably empowered so that it can appoint independent HR agencies for the evaluation of applicants from the private sector. Another reform has been the abolition of the Annual Performance Appraisal Report from the process of selection. This could pave the way for performance-based appraisal system. Public sector banks and insurance companies have been communicated these reform measures by the Department of Financial Services (DFS) which is an arm of the Union ministry of finance.
