GoI increase maximum tenure of PSU banks’ CEO and MD to 10 years: The Government of India has increased the maximum tenure of the MD and the CEO of Public Sector Banks from 5 years to 10 years. This implementation will help the government to employ the best talent and hard-working people for a longer duration in the banking sector.
GoI increase maximum tenure of PSU banks’ CEO and MD to 10 years: Key Highlights
The key highlights of the given news are mentioned below:
- A notification was published by the Indian Government on 17th November 2022 stating that the term for the appointment of MD and CEO has been extended to 10 years, from the earlier 5 years, subject to the superannuation age of 60 years.
- Earlier, the MD or CEO of a public sector undertaking (PSU) bank could serve in the bank only for a time period of 5 years, or 60 years, whichever case arrived first.
- The notice issued by the Finance Ministry of Government of India stated the following “A whole-time director, including the managing director, shall devote his whole time to the affairs of the nationalized 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”.
- It is also mentioned that the amendment would be given a name and called Nationalized Banks (Management and Miscellaneous Provisions) Amendment Scheme, 2022.
- Now the appointment at first will be made for 5 years and then it can be extended to further 5 years.
- The same is also applicable for whole-time directors of all Central Public Sector Enterprises (CPSEs).
- The central government has the power to cease the office at any time of a whole-time director, including the managing director. This can be done before their term gets finished by issuing a short notice in writing of not less than three months or by giving salary and allowances of three months in lieu of notice.
- No reason is specified for extending the tenure of the MD and CEO of PSU Banks.
Key Responsibilities of MD and CEO
As per the Financial Services Department a MD and CEO of any Public Sector Undertaking Banks has to perform 4 key responsibilities:
- Create a vision for the organization
- Consult with the Board of Directors and set the values and mission
- Strategize a structure for the organization
- To monitor, control, and exercise accountability to shareholders and responsibility towards the stakeholders.