Shillong, Oct 10: 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.
Earlier this month, the Appointments Committee of the Cabinet (ACC) revised consolidated guidelines for appointment of Whole-Time Directors (WTDs), Managing Directors (MDs), Executive Directors (EDs), and Chairpersons in public sector banks and insurance companies.
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, the forum said in a statement.
The forum, representing nine trade unions of officers and workmen across all our banks, termed it an attack on the public character of national institutions.
The State Bank of India Act,1955 (Sections19&20), the LIC Act,1956 (Sections 4,5 &22), and the Banking Companies Acts (1970/1980) explicitly vest appointment powers with the Central Government in consultation with the Reserve Bank of India (for banks) or Insurance Regulatory and Development Authority (for insurance), within a framework of public accountability, statutory discipline, and parliamentary oversight.
“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,” the forum stated.
The UFBU has demanded new guidelines be kept in abeyance with immediate effect pending comprehensive review. It wants setting up of a Joint Stakeholder Committee 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 forum said the entire policy should also be referred to the Parliamentary Standing Committee on Finance and that the government must guarantee parity and internal succession across PSBs.
“Public-sector banking and insurance are not commodities for experimentation; they are constitutional instruments of economic justice and national sovereignty. The public-sector banking system is the backbone of India’s economic sovereignty. We will not allow its statutory character to be diluted or privatised through executive backdoors,” the forum maintained.
