The move falls short of the recommendations of the Reserve Bank of India, which had suggested that the government dissociate itself from the selection process and that the top executives of public sector banks (PSBs) be selected from the wider pool of the private sector. The finance ministry, however, said the changes will bring "more objectivity" to the selection process." We will now have three subcommittees instead of one, which will interview the shortlisted candidates," said financial services secretary GS Sandhu.
Each subcommittee will have two experts and a deputy governor of RBI who will interview the candidates on different parameters before a final decision is taken by the appointment board.
The structure of the appointment board will largely remain the same with RBI governor at the helm and financial services secretary along with four other experts.
"We will hold interviews on November 13 and 14, and hope to give the appointment letter by the end of the month," said Sandhu, adding that the finance ministry will try to get the vigilance clearances for the selected candidates at the earliest. The ministry has further decided not to give a five-year fixed tenure to the selected candidates. "This we will consider for appointments in 2015-16," said Sandhu.
An executive director with a PSB slammed the new selection process and termed the changes cosmetic. "There is nothing new. Government interference continues and there is no clarity on how much weightage will be given to interview as compared with other parameters," he said.
About 15 candidates are expected to sit for the interview of chairman of eight state-run banks.Earlier this week, the government had cancelled the appointments of eight chairmen-cum-managing directors and 14 executive directors of staterun banks made by the previous UPA government.
The ministry had decided to cancel the appointments on the recommendation of a select committee set up to examine the selection process to the posts of CMDs and executive directors of PSBs for 2014-15.The committee was set up earlier this year after Syndicate Bank CMD SK Jain was arrested by the Central Bureau of Investigation for allegedly accepting bribes of Rs 50 lakh to enhance the credit limit of some companies. The finance ministry is also looking at changing the selection process of statutory auditors of PSBS.
Source : Economic Times