The Department of Personnel and Training (DoPT) which reports to Prime Minister Narendra Modi has made it clear that top-level appointments in the financial sector will have to be on the basis of seniority.
The instruction of DoPT, which recently asked the finance ministry to follow the norms in a specific case involving the appointment of the managing director of Life Insurance Corporation (LIC), will also be applicable to public sector banks while filling up top posts like executive director and chairman and managing director.
As many as six PSU banks will go headless in the next few months. While chairman and managing director positions at Indian Overseas bank and Bank of Baroda will fall vacant in August, Canara Bank and Oriental Bank of Commerce will go headless in October. Two managing director posts have been lying vacant at State Bank of India, the largest lender in the country. United Bank of India has been without a chairman for some months now.
The DoPT asked the ministry of finance to follow the principle of seniority while filling up the vacant post of managing director in LIC. The directive from the DoPT has come after some senior officials of the corporation who have put in more than 32 years of services and have residual services of three years or more had represented to it about how the finance ministry is excluding their names from selection process meant to appoint the fourth managing director of the corporation.
One post of managing director has been lying vacant after Sushoban Sarkar retired in May. DoPT norms are uniform for all financial institutions.
DoPT, after getting the representation, had asked the Appointments Committee of Cabinet (ACC) to ask the finance ministry to stick to the rules of seniority for selecting a candidate for the post of managing director of LIC.
The finance ministry, during the UPA governments tenure, had justified its decision to exclude LIC officials from the selection process on the basis of a policy which warrants that all those officials who appear for the interview thrice consecutively but not been selected have to be excluded from the selection process for any new posts and fresh eligible candidates in order of seniority should be included in the zone of consideration.
The finance ministry argued that all these officials were part of selection process when chairman and three other managing directors of the corporation were selected and