Govt Overhauls Top Bank Appointments, Opens SBI MD Role to Private Sector — Exclusive

In a landmark move, the government has opened the door for private-sector professionals to apply for top leadership roles in public-sector banks (PSBs), including the prestigious Managing Director (MD) position at the State Bank of India (SBI) — a first in Indian banking history.

The reform marks a major shift in how leadership positions such as MDs and Chief Executive Officers (CEOs) are selected across public financial institutions. The move is part of a broader effort to promote transparency, competition, and merit-based hiring at the highest levels of the banking system.

According to a communication reviewed by NDTV Profit, the Appointments Committee of the Cabinet (ACC) has approved revised consolidated guidelines for the appointment of Whole-Time Directors (WTDs), including Chairpersons, CEOs, MDs, and Executive Directors (EDs) in public-sector banks and state-run insurance companies.

Under the new framework, private-sector candidates can now apply for the SBI MD position, provided they meet stringent eligibility norms. Applicants must have at least 21 years of professional experience, including a minimum of 15 years in banking, and must have served either two years at the board level of a bank or three years at the highest level below the board.

The Financial Services Institutions Bureau (FSIB), the body responsible for recommending candidates for top financial sector appointments, has been empowered to engage independent HR agencies to assess private-sector applicants. Notably, the government has set aside the traditional Annual Performance Appraisal Reports (APARs) from the evaluation process, signaling a shift toward a more modern and performance-driven assessment model.

The Department of Financial Services (DFS) under the Ministry of Finance has formally communicated these changes to public-sector banks and state-owned insurers, outlining the revised appointment procedures.

Officials said the move is expected to attract top talent from both public and private sectors, fostering greater professionalism and accountability in public-sector banking leadership.

“This reform aims to bring transparency, diversity, and merit-based selection in leadership roles across India’s financial institutions,” a senior official noted.