‘Give weightage on articulation while selecting PSB CMDs‘

In a first major reform to clean up public sector banks, the government has scrapped the selection process for chairman & managing directors (CMDs) and executive directors (EDs) for PSU banks. The RBI will be part of the new selection process to fill up 22 vacancies that include 8 CMDs and 14 EDs.Giving his views on the above decision Pratip Chaudhuri, Former Chairman of The State Bank of India said there is need to give weightage on articulation while selecting. According to him if the RBI Governor is involved in the CMD selection process then it is sure to add a lot of value.Below is the transcript of Pratip Chaudhuri's interview with CNBC-TV18's Shereen Bhan.Q: How significant a move is this on the part of the government to review the process of appointing CMDs and EDs? Some would say the process had become deeply politicised and deeply political. Do you believe that there is a need to review this process which is exactly what the government intends to do now?A: I don’t think the process was political. It was only the last selection which came in for a lot of criticism. My understanding is that the process comprises of a selection committee comprising normally of the RBI governor. However RBI governor earlier used to sit on the board but now he delegates it to the deputy governor and there is a secretary of the department of financial services (DFS) and there are two outsiders, normally an academic and also a former chief of a reasonably large size bank. I think the process itself is good but I would like to break it up into two, the selection of CMDs and the selection of EDs. Selection of CMD - every year maximum 5 or 6 positions fall vacant. I do not think it is impossible for RBI governor to be a part of the selection process. It would lend a lot of respectability and lot of value if RBI governor himself sits on the board accompanied by the secretary, DFS and may be 2-3 outsiders. So, there is nothing wrong with that.However the process should be to my mind broken up into two parts; the banks which are falling due in the first half and the banks which are falling due in the second half. There should be a group discussion in the interview process as well. The bank chiefs have to interact with the media, analysts, foreign banks, so therefore their articulation - to what extent they can put forward their position and to what extent they can reasonably interact with other similarly placed people that should be judged.Q: You are saying the eligibility criteria should also be looked at differently and things like communication skills and so on and so forth should be given more weight? A: No, not more weight. It is getting zero weight; it should get some weight. Q: We don’t know exactly what the new process is going to be. The government in its press release has said it will finalise a new process of selection for CMDs and EDs in the future but at this point in time it is looking at the report that has been submitted by the Expenditure Secretary on this matter. If the government is listening to your point of view at this point in time, besides the points that you just talked about what else would you like to see being done when this new process is put in place?A: The process itself is good but the process can remain good when the people administering the process remain good and they refuse to be swayed by influences from outside and take into consideration factors other than merit. So, therefore it is up to the people, no matter who you put on the board, even if you put the Chief Justice or President or somebody that person has to act with total objective. Therefore, what was missing this time was perhaps the absence of objectivity and there is a widespread feeling that considerations other than merit have crept in.