Breaking News: Govt opens SBI MD Post to Private Sector, Private Bank Employees can apply for MD Post in SBI

In a landmark move, the government has for the first time opened one of the Managing Director (MD) positions at the State Bank of India (SBI) to private-sector bankers, marking a major shift in how leadership roles are chosen in India’s largest public-sector bank.

The Department of Financial Services (DFS), under the Ministry of Finance, has issued a notification to all public-sector banks (PSBs) and state-owned life and non-life insurers, informing them that the Appointments Committee of the Cabinet (ACC) has approved revised consolidated guidelines for the appointment of whole-time directors (WTDs) — including Chairpersons, Chief Executive Officers (CEOs), Managing Directors (MDs), and Executive Directors (EDs).

Private-Sector Eligibility for SBI MD Post

Till now, only SBI employees who got promoted to higher posts through internal promotions, were appointed as MD. This was a tradition in SBI and has been followed in the bank since the establishment. But now, it’s going to change forever. Now, employees from private sector can apply for the post of MD in SBI.

Under the new norms, professionals from the private sector applying for one of SBI’s four MD posts must have at least 21 years of overall professional experience, including a minimum of 15 years in banking, and either two years of experience at the board level of a bank or three years at the highest level below the board.

Notably, candidates from public-sector backgrounds will also remain eligible to apply for the MD position opened to private-sector applicants.

The first vacancy for private-sector candidates could arise in January 2026, when the tenure of current SBI MD Ashwini Kumar Tewari ends. This move also raises the possibility that, in the future, a private banker could become the Chairman of SBI, as the bank’s Chairman is selected from among its four MDs.

Role of FSIB Strengthened

The Financial Services Institutions Bureau (FSIB) has been empowered to assess and recommend candidates for top posts, without relying on Annual Performance Appraisal Reports (APARs).
To support the selection process, FSIB has been permitted to hire an HR agency to conduct behavioural and competency assessments. However, the agency’s role will be limited to preliminary evaluation and will not extend to shortlisting candidates.

Stricter Rules for PSU and Insurance Executives

The revised guidelines introduce tougher eligibility conditions for senior roles in PSBs and insurance companies. Officers who have received two or more major penalties in their career will be disqualified from applying for FSIB-assessed positions. Applicants must also disclose any penalties—major or minor—imposed in the last 10 years.

While APAR scores will no longer be considered for the assessment of Chairman, CEO, and MD posts, they will continue to carry a weightage of up to 30 marks for Executive Director-level positions. In addition, EDs of non-life insurers can now be transferred only with ACC approval, ensuring greater oversight where transfers were previously managed internally by the DFS.

More Details will be released soon.