Bank Unions Reject Opening Up SBI, PSB Top Posts To The Private Sector

United Forum of Bank Unions or the UFBU has launched a strong protest against the government's decision to open top management positions in Public Sector Banks (PSBs) and the State Bank of India (SBI) to private-sector candidates, terming the move an "executive privatisation" that violates the statutory character and legislative intent of nationalised institutions.

The UFBU, an umbrella organization of nine unions, registered its condemnation of the revised Appointments Committee of the Cabinet (ACC) guidelines, which now allow for lateral entry of private-sector executives for one Managing Director position in SBI and LIC, as well as Executive Director positions in other PSBs.

The unions argue that introducing outside candidates without amending the foundational statutes, including the State Bank of India Act, 1955, and the Banking Companies (Acquisition and Transfer of Undertakings) Acts, 1970 & 1980, is a "serious legal and constitutional transgression."

The revised guidelines are criticized for materially altering the appointment framework by, converting public-sector leadership roles into open-market appointments. Replacing the merit-based Annual Performance Appraisal Report system. Using private HR agencies for 'behavioural assessment' and selection based on 'interaction.'

UFBU states that these changes dismantle the historic model of career-based succession and institutional continuity, arguing that such a fundamental alteration to the character of statutory institutions requires legislative amendment and parliamentary debate, not merely an executive instruction.

The forum has demanded that the revised ACC guidelines be kept in abeyance immediately pending a comprehensive review. It also called for the establishment of a joint stakeholder committee comprising the Department of Financial Services (DFS), RBI, Financial Services Institutions Bureau (FSIB), UFBU, and independent jurists to review the appointment frameworks for all PSBs and SBI. Unions emphasized the need to preserve the principle that leadership should emerge from within the public-sector banking cadre.

(With inputs from PTI)