The Financial Services Institutions Bureau (FSIB), the government agency responsible for appointing top executives in public sector financial institutions, will conduct interviews this week for the Managing Director (MD) and Chief Executive Officer (CEO) roles at four public sector banks. The four Banks are:
- Indian Bank
- Indian Overseas Bank
- Central Bank of India
- Punjab & Sind Bank
This move aims to address a dispute between the Finance Ministry and the Reserve Bank of India (RBI) over Asheesh Pandey, Executive Director of Bank of Maharashtra, who was previously shortlisted for the MD position at Indian Bank.
The Reserve Bank of India (RBI) had raised serious concerns regarding the behavior and conduct of Asheesh Pandey, an executive director at Bank of Maharashtra (BoM), who is currently being considered for the role of Managing Director and CEO at Indian Bank. The RBI has communicated its observations to the finance ministry, urging them to consider these remarks while evaluating Pandey’s suitability for the position. The RBI’s objections stemmed from an exit meeting in September 2023, during which Pandey’s behavior was deemed “not befitting his position and responsibilities concerning regulatory compliance.” Click here to read this controversy in detail.
Fresh Selection Process Initiated
Given the RBI’s objections, the Finance Ministry decided to initiate a fresh selection process. A senior official explained that the decision was made to address all concerns raised by the regulator and ensure transparency in the appointment process. The FSIB will now interview eligible Executive Directors for the MD roles at Indian Bank, Indian Overseas Bank, Central Bank of India, and Punjab & Sind Bank.
Timeline and Current Status
The tenure of Indian Bank’s current MD, Shanti Lal Jain, will end on December 31, making the selection process urgent. While the DFS had sought clarification from the RBI on Pandey’s appointment, the central bank reiterated its earlier stance without further elaboration. This has necessitated the new round of interviews, with at least a dozen candidates expected to participate.
The Exit Meeting Context
The September 2023 exit meeting referred to in the RBI’s letter was part of the regulator’s annual inspection process. It involved discussions on compliance issues and was attended by both Asheesh Pandey and AS Rajeev, who was then the MD and CEO of the Bank of Maharashtra. Rajeev is now serving as a Vigilance Commissioner at the Central Vigilance Commission.
This re-selection process underscores the importance of maintaining high standards for leadership in public sector banks, particularly regarding regulatory compliance and conduct. The final appointments are expected to play a critical role in steering these banks toward growth and stability.
