On Wednesday evening, it designated 44-year-old Nitesh Ranjan, a chief general manager at Union Bank of India, as the state-run lender’s executive director. He will be part of the bank’s top management along with Monika Kalia, 48, his counterpart at Bank of India. Ranjan can potentially spend close to 16 years on the bank’s board, and Kalia will only have a few years less, while 50-year-old Debdatta Chand can hope to spend close to a decade on the board of Bank of Baroda (BoB).
The latest set of appointments, however, come with a crucial rider — at least for those who have a longer run at the top — the performance of these executives will be reviewed after two years.
Although there are only a few who will get to spend a decade or more with a board seat, the numbers seem to be getting bigger and in any case it is a far cry from just a few years ago when nearly half the executive directors did have the mandatory two years of remaining service to be considered for appointment as a bank’s MD.
Unlike the private sector where some of the executives such as HDFC Bank’s Aditya Puri spent a quarter century as the MD & CEO, a typical public sector executive had a two-three year run at the top.
Even beyond the financial sector, there are few CEOs who have been given a longer run. And, wherever they were given a long tenure, reappointment did not come through. Cases in point being the late Subir Raha, who was seen to have a had successful term at ONGC until he fell out with the government. Even in public sector banks, there are several bankers who did not get a second term despite being less than 60 years old, the current retirement age. For instance, K R Kamath’s term ended at PNB, or more recently P S Jayakumar, who led the merger of Dena Bank and Vijaya Bank.
But the change does tie in with a new strategy in the government too where several secretaries, including T V Somanathan (expenditure) and Tuhin Kanta Pandey (Dipam), will have a near six-year tenure at the top.