The government is opening up key management positions in PSBs to private sector candidates

The measure is intended to promote transparency, competition and merit-based hiring at the highest levels of the banking system | Photo credit: Rawpixel

Now, private sector candidates can apply for the post of Managing Director in State Bank of India and for Managing Director-cum-Chief Executive Officer in any of the eleven public sector banks. The Cabinet Committee on Appointment (ACC) has approved the changes in the guidelines.

According to a new set of guidelines made public by the Financial Services Department, out of the four posts of Managing Director in SBI, one position has been opened for private sector candidates and individuals working in public sector financial institutions. To date, all MD and chairman positions have been filled by internal candidates. Besides SBI, there are eleven public sector banks including Punjab National Bank, Bank of Baroda, Canara Bank, Union Bank of India and Bank of India.

Promote transparency

This 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 revised guidelines, candidates should have a minimum of 21 years of experience with a minimum of 15 years of banking experience and a minimum of 2 years at the banking board level, as far as private sector candidates are concerned. Candidates eligible for public sector positions would also be eligible to apply for such vacancies, the report said.

From the date of commencement of these guidelines, the first vacancy of MD, SBI would be considered vacant. Subsequent vacancies, arising after filling of the first vacancy, would be filled up by eligible candidates holding positions in PSBs, it added. Regarding EDs in nationalized banks, it said one position in a bank would be open to all eligible candidates, including private sector candidates. There are four EDs in large nationalized banks, while two positions are in small lenders.

For private candidates, the individual must have a minimum of 18 years of experience, of which 12 years are in banking, of which 3 years are at the highest level below the board level. The officer of the nationalized banks with a combined service of four years at the level of Chief General Manager and General Manager till FY2027-28. Thereafter, the eligibility requirement is Chief General Manager with two years of service, it added.

CVO is not eligible

Candidates holding the post of Chief Vigilance Officer (CVO) are not eligible for appointment to the post.

The Financial Services Institutions Bureau (FSIB), the body responsible for recommending candidates for appointments in the top financial sector, has been given the power to engage independent HR firms to assess private sector applicants. Notably, the government has excluded traditional annual performance appraisal reports from the evaluation process, signaling a shift toward a more modern and performance-oriented appraisal model.

Published on October 10, 2025