The Indian government has introduced significant reforms in the appointment process for top leadership positions in public sector banks (PSBs) and state-owned insurance companies. The Appointments Committee of the Cabinet (ACC) has approved revised guidelines for appointing Whole-Time Directors, including Managing Directors, Chairpersons, and Executive Directors. This move aims to enhance leadership diversity, meritocracy, and transparency in the public banking sector.
One of the key changes applies to the State Bank of India (SBI), where three out of four Managing Director positions must now be filled by candidates from other PSBs, and one position is open to private sector professionals who meet the eligibility criteria. To be eligible, private sector candidates must have at least 21 years of professional experience, 15 years in banking, and have served at the board level of a bank or at the highest level below the board.
The Financial Services Institutions Bureau (FSIB) will lead the selection process with the help of independent HR agencies to evaluate private sector candidates. The government has also eliminated the requirement for Annual Performance Appraisal Reports (APARs) during the selection process, shifting the focus towards performance-based assessment.
The Department of Financial Services (DFS) has communicated the revised guidelines to all PSBs and state-owned insurance companies, which are expected to reshape the way top talent is attracted and appointed across India’s public financial institutions. Senior officials believe that this reform will enhance transparency, foster competition, and bring in a merit-based selection culture at the highest levels of India’s banking sector.
The government hopes that these new guidelines will encourage a broader talent pool and strengthen the professionalism and accountability of PSB leadership. The reform is part of a larger initiative to modernize top-level hiring in India’s financial institutions and align public sector recruitment with global best practices in banking leadership. With a strong domestic and international presence, SBI is expected to play a critical role in India’s economic growth and financial inclusion initiatives.