Procedural irregularities hold up SBI chief's appointment

The formal appointment of the State Bank of India (SBI) chairman has been delayed due to procedural irregularities in selection of the candidate proposed by the finance ministry.

The irregularities have been highlighted by Cabinet Secretary K M Chandrasekhar. He has written to the finance ministry, questioning Pratip Chaudhury’s selection for the top job at the country’s largest lender.

A senior government official told Business Standard that Hemant Contractor’s name was on the top of the list during the selection of managing directors (MDs). However, for the chairman’s post, Chaudhury’s name was sent to the Cabinet Secretariat, he said. He added the cabinet secretary had asked the ministry to explain the reason for this change.

The official said usually the names proposed by the finance ministry for top posts at public sector banks were cleared. But this was an unusual situation, he said. “A final decision is likely to be taken after the finance ministry’s explanation,” he said.

The panel to select the SBI chairman interviewed four deputy MDs – Hemant Contractor, Pratip Chaudhury, Diwakar Gupta and A Krishna Kumar.

The government has handed over the interim charge of the bank to Managing Director R Sridharan. O P Bhatt retired from the post yesterday after a five-year tenure.

Sridharan, whose is to retire four months from now, is likely to continue on the post till his term ends.

Sridharan was appointed as an MD in December 2008 and was looking after SBI’s associate banks and subsidiaries.

There have earlier instances of SBI being headed by an acting chairman. In 2006, when A K Purwar retired, one of the MDs, T S Bhattacharya, was given the interim charge.

Source: Business Standard