BBB unlikely to rope in private candidates for Union Bank of India top position

Banks Board Bureau (BBB), which has been given the task of recommending candidates for the top posts in public sector banks, is unlikely to invite private sector candidates to participate in the selection process for the post of Managing Director and CEO of Union Bank of India (UBI).

It had recently stunned the banking world after it scrapped the earlier advertisement in December 2021 inviting applications for the position of MD and CEO of UBI by January 28, 2022. If the current indications are anything to go by, the selection for the top post may happen from “internal candidates” within the public sector banking system, sources in banking industry said.

The incumbent MD and CEO Rajkiran Rai is due to demit office in May 2022. A “technical mistake” — that’s how some bankers call it — may have prompted BBB to cancel its earlier December 2021 advertisement inviting applications.

As eligibility criteria, BBB had in December 2021 said Indian nationals, age 45-57 years, with an exemplary track record and minimum 15 years experience in mainstream banking, of which at least one year should be at the Board level, can apply for the post. BBB had recently, while cancelling its earlier advertisement, also said that the “prescribed selection process for the position will be taken up in due course”. This is being read by several banking industry observers as a message that selection process will definitely be there, albeit without private sector candidates participation.

Technical mistake

Banking industry insiders attribute the BBB move to cancel its advertisement to the fact that Union Bank of India was not meeting the criteria set by the government for inviting private sector executives to head the bank. It maybe recalled that the Government had few years ago decided that banks with business of over ₹10-lakh crore could invite private sector executives for the selection process of chief executive position.

So when the list of such banks were drawn, Union Bank of India did not make the cut and was therefore not named in the relevant notification. However, now, with the Union Bank having gobbled Andhra Bank and Corporation Bank in the recent amalgamation round of PSBs, its overall business has exceeded the ₹10-lakh crore mark.

This “technical point” that Union Bank did not strictly qualify to the criteria approved by the Cabinet was brought to the notice of BBB, prompting it to withdraw its advertisement, sources said. BBB has now realised that Union Bank of India had not been covered under the earlier notification issued by the government. So now BBB has two options — either approach the government (Appointments Committee of Cabinet) to get its approval to onboard a private sector person or go in for a process to select the chief executive from out of the internal candidates of the public sector banking system, they said.

The buzz is that the BBB may settle for the second option. As the ₹10-lakh crore threshold was a Cabinet decision, any relaxation or decision around it will require approval of the Cabinet, they added.