According to recent information presented in Lok Sabha, six public sector banks (PSBs) are currently operating without a non-executive chairman. These banks include Bank of India, Bank of Maharashtra, Central Bank of India, Indian Bank, Indian Overseas Bank, and UCO Bank, as stated in a written reply by Bhagwat Karad, Minister of State for Finance, in response to an unstarred question.
In April 2015, the government introduced a provision to separate the posts of chairman and managing director in PSBs and appoint distinct individuals to these positions starting from the vacancy year 2014-15. Consequently, nine banks out of the 11 nationalized banks appointed non-executive chairmen, including Bank of Baroda, Bank of India, Canara Bank, Central Bank of India, Indian Bank, Indian Overseas Bank, Punjab National Bank, Punjab and Sind Bank, and Union Bank of India.
Non-executive chairmen in PSBs play a crucial role in presiding over board meetings and committees wherever they serve as chairpersons. However, in the absence of a chairman, the managing director is required to preside over these meetings, in accordance with the provisions outlined in paragraph 12(6) of the Nationalised Banks (Management and Miscellaneous Provisions) Scheme 1970 and 1980.
Experts have highlighted that even though six PSBs are currently without a chairman, the banks are still functioning smoothly. Additionally, the government established the Financial Services Institutions Bureau (previously known as the Banks Board Bureau) with the responsibility of recommending candidates for appointment as non-executive chairmen.
