FSIB to interview CEO candidates for four PSU banks

Mumbai | New Delhi: The government agency for selecting candidates to the top echelons at public sector financial institutions will hold interviews later this week for the position of managing director and chief executive for four banks including Indian Bank - thus ending the rift between the finance ministry and the central bank over the appointment of Asheesh Pandey, executive director of Bank of Maharashtra, who was in the fray for the top post at the Chennai-based bank.

In a rare instance, the Reserve Bank of India (RBI) made certain adverse observations against Pandey, and it wanted the Department of Financial Services (DFS) to "factor" them in while considering his appointment as CEO, ET reported July 13. The RBI's observations had to do with Pandey's "conduct" and were not related to any vigilance case.

The Financial Services Institutions Bureau (FSIB) will hold interviews with eligible executive directors for top positions at the Indian Bank, Indian Overseas Bank, Central Bank of India and Punjab & Sind Bank, said people aware of the development.


A 'Cryptic' Response
In April, FSIB had announced that Pandey was shortlisted to head Indian Bank, but within a fortnight, RBI sent its observations to the finance ministry. The term of Indian Bank's current MD Shanti Lal Jain will end on December 31.

Following this, a senior finance ministry official told ET that delayed observations were made despite deputy governor M Rajeshwar Rao representing the central bank as a member of FSIB.

People privy to the matter said that a few weeks ago, the DFS sought RBI's approval to appoint Pandey for the top post at Indian Bank arguing that there were no pending vigilance cases against him. Yet again, RBI gave a cryptic response saying "Please refer to our earlier letter where we have communicated our stance", said a person aware of this communication.

Explaining the rationale for conducting a re-selection process, a senior government official said that "certain observations were made by the regulator and considering that, it decided to conduct a fresh selection process so that all concerns are addressed".

AN EXIT MEETING
In April, the RBI, in a communication to the finance ministry, pointed out that in September 2023, during an exit meeting to discuss supervisory findings, the "behaviour and conduct" of Asheesh Pandey was "found not befitting his position and responsibilities concerning regulatory compliance".

The exit meeting is the final meeting to iron out differences between the RBI and a bank over the concerns raised by the regulator in its annual inspection report. The exit meeting that RBI referred to in its letter was also attended by AS Rajeev, who was then the MD and CEO of the Bank of Maharashtra along with Pandey. Currently, Rajeev is a Vigilance Commissioner at the Central Vigilance Commission.

At least a dozen executive directors will be interviewed later this week, people cited above said.

The term of SK Saha, MD and CEO of Punjab & Sind Bank, will end in June next year. The term of M.V. Rao, MD & CEO of Central Bank of India, will end in July 2025, while the term of A.K. Srivastava, MD and CEO of Indian Overseas Bank, will end in December 2025.

The government official also stated that the government is committed to proactive succession planning across all financial institutions. Those eligible for an extension will be assessed based on their performance.