Bank union forum opposes govt move to open top posts at public sector banks to private sector candidates
Says policy must be kept in abeyance, government must guarantee parity, and internal succession across PSBs
- Oct 10, 2025,
- Updated Oct 10, 2025 4:57 PM IST
The United Forum of Bank Unions (UFBU) has opposed the government’s decision to open up some of the top posts in public sector banks including State Bank of India as well as the Life Insurance Corporation to private sector candidates.
“From the United Forum of Bank Unions (UFBU), representing nine trade unions of officers and workmen across all our banks, we wish to convey our unequivocal and strongest protest against the recent executive orders issued by the Appointments Committee of the Cabinet,” it said in a statement.
These orders, issued without any amendment to the enabling statutes—namely the State Bank of India Act, 1955, the Banking Companies (Acquisition and Transfer of Undertakings) Acts, 1970 and 1980, and the Life Insurance Corporation Act, 1956—constitute a serious legal and constitutional transgression, and amount to a de facto privatisation of leadership in statutory public institutions, it further said.
“By authorising lateral entry of private-sector executives into statutory leadership positions, removing APAR-based evaluation, and introducing HR-agency assessments, these guidelines alter the public character, accountability framework, and legislative intent underlying the nationalisation of banks and the State Bank of India Act, 1955, that too without any Parliamentary amendment or consultation,” it underlined.
For the first time, the ACC has opened top spots in nationalised banks including the position of Managing Director at State Bank of India to private sector individuals through an order dated October 8, 2025, on the revised guidelines for selection of MDs, Chief Executive Officers (CEOs), and Whole-Time Directors (WTDs) across public financial institutions.
The Financial Services Institutions Bureau, which is the nodal agency for recommending persons for appointment as WTDs and non-executive chairpersons on the Boards of financial services institutions has also been empowered to hire and HR agency for carrying out the behavior and competency assessment of the candidates.
The UFBU also said that “opening the topmost echelons to outsiders from private and corporate sector while lifelong PSB officials remain ineligible will demoralise the cadre, disrupt internal career progression, and weaken the stewardship culture built since nationalisation”.
It has asked that the new guidelines be kept in abeyance with immediate effect pending comprehensive review. Further, a Joint Stakeholder Committee should be set up comprising officials from the department of financial services, Reserve Bank of India, FSIB, UFBU, and independent jurists to review leadership-appointment frameworks for all public sector banks and SBI. The entire policy should also be referred to the Parliamentary Standing Committee on Finance, it has demanded and has also said the government must guarantee parity and internal succession across PSBs.
The United Forum of Bank Unions (UFBU) has opposed the government’s decision to open up some of the top posts in public sector banks including State Bank of India as well as the Life Insurance Corporation to private sector candidates.
“From the United Forum of Bank Unions (UFBU), representing nine trade unions of officers and workmen across all our banks, we wish to convey our unequivocal and strongest protest against the recent executive orders issued by the Appointments Committee of the Cabinet,” it said in a statement.
These orders, issued without any amendment to the enabling statutes—namely the State Bank of India Act, 1955, the Banking Companies (Acquisition and Transfer of Undertakings) Acts, 1970 and 1980, and the Life Insurance Corporation Act, 1956—constitute a serious legal and constitutional transgression, and amount to a de facto privatisation of leadership in statutory public institutions, it further said.
“By authorising lateral entry of private-sector executives into statutory leadership positions, removing APAR-based evaluation, and introducing HR-agency assessments, these guidelines alter the public character, accountability framework, and legislative intent underlying the nationalisation of banks and the State Bank of India Act, 1955, that too without any Parliamentary amendment or consultation,” it underlined.
For the first time, the ACC has opened top spots in nationalised banks including the position of Managing Director at State Bank of India to private sector individuals through an order dated October 8, 2025, on the revised guidelines for selection of MDs, Chief Executive Officers (CEOs), and Whole-Time Directors (WTDs) across public financial institutions.
The Financial Services Institutions Bureau, which is the nodal agency for recommending persons for appointment as WTDs and non-executive chairpersons on the Boards of financial services institutions has also been empowered to hire and HR agency for carrying out the behavior and competency assessment of the candidates.
The UFBU also said that “opening the topmost echelons to outsiders from private and corporate sector while lifelong PSB officials remain ineligible will demoralise the cadre, disrupt internal career progression, and weaken the stewardship culture built since nationalisation”.
It has asked that the new guidelines be kept in abeyance with immediate effect pending comprehensive review. Further, a Joint Stakeholder Committee should be set up comprising officials from the department of financial services, Reserve Bank of India, FSIB, UFBU, and independent jurists to review leadership-appointment frameworks for all public sector banks and SBI. The entire policy should also be referred to the Parliamentary Standing Committee on Finance, it has demanded and has also said the government must guarantee parity and internal succession across PSBs.