Mumbai: In a major policy change, the Indian government has allowed professionals from the private sector to apply for top leadership roles in public-sector banks, including the high-profile Managing Director (MD) post at the State Bank of India (SBI). This is the first time such an opportunity has been extended beyond public-sector employees.
New Rules for Top Bank Appointments
This reform is part of a new policy approved by the Appointments Committee of the Cabinet (ACC), which changes how MDs, CEOs, and Executive Directors (EDs) are selected in public-sector banks and state-run insurance firms. These changes are meant to promote merit-based hiring, transparency, and competition.
Who Can Apply for SBI MD?
Under the new rules, private-sector candidates must meet certain conditions to be eligible for the SBI MD post:
- At least 21 years of professional experience,
- A minimum of 15 years in the banking sector,
And either 2 years at the board level of a bank or 3 years at the highest level below the board.
New Hiring Process Without Traditional Appraisals
To make the process more modern and fair, the government will not use Annual Performance Appraisal Reports (APARs) for evaluating applicants. Instead, the Financial Services Institutions Bureau (FSIB) will assess candidates, and independent HR agencies can also be used to evaluate private-sector applicants.
Why This Matters
This step is expected to bring in top talent from both the private and public sectors. It’s seen as a way to bring more professionalism, accountability, and diversity to the leadership of public financial institutions.
Clear Communication to Banks
The Department of Financial Services (DFS), under the Finance Ministry, has already informed public-sector banks and insurers about the new guidelines.
