The government has increased the maximum term for the MD and CEO of public sector banks (PSBs) from 5 to 10 years, subject to a retirement age of 60, as per a government notification. This also applies to all PSBs’ full-time directors. The decision is anticipated to assist the government in keeping the top banking talent on staff.
Previously, the MD or executive director of a public sector undertaking (PSU) bank could only hold the position for a maximum of 5 years or until they turned 60, whichever came first. Additionally, this is applicable to full-time directors of all central public sector organisations (CPSEs).
The term of the appointment has been raised from the previous 5 years to 10 years, subject to the superannuation age of 60 years, according to the notification dated November 17.
“A whole-time director, including the managing director, shall devote his whole time to the affairs of the nationalised bank and shall hold office for such initial term not exceeding five years and extendable up to a total period, including the initial term, not exceeding 10 years, as the central government may, after consultation with the Reserve Bank, specify and shall be eligible for re-appointment,” the notification as accessed by news agency PTI read.
It further added that the amendment would be known as the Nationalised Banks (Management and Miscellaneous Provisions) Amendment Scheme, 2022.
A whole-time director’s term of office, including the managing directors, may be terminated by the central government at any time before the end of the term specified by giving him written notice that is at least three months long or three months’ salary and benefits in lieu of notice.
(With PTI inputs)