The Indian government has raised the tenure of all wholetime directors, including managing directors and CEOs, of state-run banks.
As per the updated guidelines issued on 17 November, the maximum tenure of CEO and MD of the public sector undertaking (PSU) banks has been increased to 10 years.
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This move is aimed at helping the government retain talent in the sector.
Earlier, the MD or executive director of a PSU bank was eligible for a maximum tenure of five years, or 60 years, whichever was earlier.
The tenure for the appointment has been extended to 10 years, subject to superannuation age of 60 years.
As per the notification, a candidate can be appointed for five years initially, which can be extended for another five years.
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By GlobalDataThe notification reads: “A whole-time director, including the managing director, shall devote his whole time to the affairs of the nationalised bank and shall hold office for such initial term not exceeding five years and extendable up to a total period, including the initial term, not exceeding 10 years, as the central government may, after consultation with the Reserve Bank, specify and shall be eligible for re-appointment.”
Although the appointments are made by a committee of the cabinet headed by the prime minister, the candidates are chosen by the Financial Services Institutions Bureau under the department of financial services.
Currently, there are 12 PSU banks operating in the country, including State Bank of India.
