The government has put on hold a proposal that sought to raise the retirement age of the State Bank of India (SBI) chairperson to 65 years and that of managing directors of other public sector banks (PSBs) to 62, sources have told Moneycontrol.
The proposal, which was under discussion for several months, sought to bring greater stability to India’s largest public sector financial institutions.
"The file moved, but the extension of the retirement age for PSBs is now on the back burner. The matter is closed as of now," one of the sources said.
The retirement age for the SBI chairperson is 63 and that of PSB MDs is 60.
The proposed changes would have allowed the senior executives more time in office, leading to greater continuity in decision-making at the highest levels of India’s banking sector.
Appointments to top positions in PSBs, including the SBI, are for a three-year term, with the possibility of an extension.
SBI chairman Dinesh Khara took over the job in October 2020 for a three-year term after serving as managing director (global banking and subsidiaries) at the country’s largest state-owned bank.
The Appointments Committee of the Cabinet extended his tenure to August 2024. He turns 63 on August 28.
The now-shelved proposal also included a plan to extend the retirement age of the Life Insurance Corporation of India (LIC) chairperson from 62 to 65 years, in line with that of the SBI top boss.
Both LIC and SBI play critical roles in the financial sector and the proposed extensions were seen as a means to keep experienced leadership to ensure continuity.
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