The Banks Board Bureau (BBB) on Friday recommended the name of Dinesh Kumar Khara, SBI's senior-most managing director, as the next chairman of the country's largest lender.
Khara will replace SBI Chairman Rajnish Kumar, whose three-year term comes to an end on October 7.
Members of BBB, the headhunter for state-owned banks and financial institutions, interviewed four managing directors of State Bank of India (SBI) on Friday for the upcoming vacancy.
"Keeping in view their performance in the interface and their overall experience, the Bureau recommends...Dinesh Kumar Khara for the vacancy of Chairman in State Bank of India (and) Challa Sreenivasulu Setty as the candidate on the Reserve List for the said vacancy," BBB said in a statement.
BBB's recommendation will now be forwarded to the government.
The final decision will be taken by the Appointments Committee of the Cabinet, headed by Prime Minister Narendra Modi.
As per convention, the SBI chairman is appointed from a pool of serving managing directors at the bank.
Interestingly, Khara was among the contenders for the chairman's post in 2017 as well.
Khara was appointed as managing director of SBI in August 2016 for a three-year term. He got a two-year extension in 2019 after review of his performance.
An alumnus of the Faculty of Management Studies, Delhi University, Khara heads the Global Banking division of SBI. He holds a board-level position and supervises the businesses of SBI's non-banking subsidiaries.
Prior to being appointed managing director, he was the MD and CEO of SBI Funds Management Pvt Limited (SBIMF).
Khara, who joined SBI in 1984 as a Probationary Officer, was instrumental in merging five associate banks and Bharatiya Mahila Bank with SBI effective April 2017.
The new SBI chairman will have a tough task ahead as the banking sector is going through a major crisis due to the COVID-19 pandemic.
As on June 30, SBI had made total provisions of Rs 3,000 crore to cover potential COVID-19 losses. Gross non-performing asset (NPA) ratio of 5.44 per cent was lower than 6.15 per cent in the March quarter.
BBB is headed by former Department of Personnel and Training secretary Bhanu Pratap Sharma.
Its members include Secretary, Department of Financial Services; Secretary, Department of Public Enterprises; and RBI Deputy Governor in charge of banking.
Other part-time members are Vedika Bhandarkar, former MD of Credit Suisse; P Pradeep Kumar, former MD of SBI; and Pradip P Shah, founder managing director of ratings agency Crisil.
Prime Minister Narendra Modi had in 2016 approved the constitution of BBB as a body of eminent professionals and officials to make recommendations for appointment of whole-time directors as well as non-executive chairpersons of public sector banks (PSBs).
It was also entrusted with the task of engaging with the board of directors of all PSBs to formulate appropriate strategies for their growth and development.
The government wanted to encourage bank boards to restructure the lenders' business strategies and also suggest ways for their consolidation and merger.