Staggering 35 % vacancies, only 10 % women directors in public sector bank management boards


In recent years, whenever Parliament sessions are held, the data tabled by the Union Government with regard to the size of bad loans (non-performing assets or NPAs), the volume of loans written off, the total amount of recoveries from borrowers, names and numbers of wilful defaulters, hits the headlines. Readers discuss it for a few days and then forget all about it until more such data becomes public in subsequent sessions of Parliament. 

Questions are rarely raised about accountability for this state of affairs. Rarely have Parliamentarians asked whether the management boards of the public sector banks (PSBs) are functioning at full strength, as per law. This research exercise goes into the vacancies on the management boards of 12 public sector banks (PSBs) as of 1900hrs on 08 January, 2023.
The data about incumbent Directors and vacant posts is sourced from the website of the Financial Services Institutions Bureau (FSIB). Until 01 July, 2022 FSIB was known as the Bank Boards Bureau (BBB). It was established by the Union Government in 2016 pursuant to the recommendations made by the Committee to Review Governance of Boards of Banks in India headed by Prof Pulin B Nayak former Director, Delhi School of Economics. 

FSIB publishes both incumbency and vacancy data with regard to the management boards of PSBs and other designated public sector financial institutions like the LIC, EXIM Bank, other government-controlled insurance companies and NABARD. FSIB is responsible for recommending suitable candidates to the Union Government for appointing whole-time Directors and non-executive chairpersons of public sector financial institutions including public sector banks (PSBs). Their recommendations are also accessible on their website.
FSIB regularly updates the incumbency and vacancy data for all financial institutions that are covered by its mandate. This data collection exercise began in December 2022. By the time the drafting of this note began late last week, some entries in both categories had changed. So readers may be rest assured that the findings below are based on the latest data that FSIB has made public. The data table compiled from the information uploaded on FSIB’s website is in the 1st attachment below.

Main findings from the data analysis

  • Taken together, the number of incumbent Directors and vacant posts on the PSB boards comes to 186 posts. Out of this only 122 posts have been filled up as on date;
  • Out of these incumbent Directors 109 are men, only 13 of them are women (10.66%). Canara Bank, Indian Overseas Bank, Punjab and Sind Bank and Union Bank of India have two women Directors each. Bank of Maharashtra, Central Bank of India and UCO Bank do not have any woman Director on their Board. The remaining five PSBs have one woman Director each on their respective Boards;
  • A total of 64 posts of Directors are vacant in the 12 PSBs. This is more than one third (34.41%) of the 186 posts that ought to have been filled up;
  • The largest and the richest among the PSBs- State Bank of India has seven vacancies on its Board. Bank of Maharashtra and Central Bank of India also have seven vacancies each;
  • Bank of India and UCO Bank have six vacancies each on their respective boards. The remaining banks have between four to five vacancies each;
  • None of the management boards PSBs have the full complement of Directors as required by law;
  • The oldest vacancy is from September 2009 in Punjab and Sind Bank and the most recent vacancy is from 01 January, 2023 in Canara Bank. The remaining vacancies have arisen between 2014 and 2022. Seven posts fell vacant in 2014, five in 2015, 13 in 2016, five in 2017, three in 2018, eight in 2019, 12 in 2020, four in 2021 and two in 2022
  • It is interesting to note that at least 13 vacancies continue to exist from before 2016- the year in which the BBB now rechristened as FSIB was constituted. This number might increase if the exact date on which the BBB became fully operational;
  • Category-wise, there are 12 vacancies each in the Officer Employee Director and Workmen Employee Director category. In other words, none of the 12 PSBs have made appointments to these posts as required by law. Officer Employee Directors and Workmen Employee Directors are appointed under Sections 9(3)(f) and 9(3)(e) respectively, of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. These statutory provisions are fleshed out in paragraph 3 of Chapter 2 of the Nationalised Banks (Management and Miscellaneous Provisions) Scheme, 1970 issued under the 1970 Act. More on this point in the next segment;
  • With the exception of the State Bank of India, 11 PSB boards do not have a non-official Director with Chartered Accountancy specialisation. Banking experts point out, this Director is the Chairperson of the Bank’s Audit Committee which vets the decisions of these banks, especially with regard to lending operations. More on this point in the next segment;
  • The posts of non-Executive Chairman are vacant in six PSBs, namely, Bank of India, Bank of Maharashtra, Central Bank of India, Indian Bank, Indian Overseas Bank and UCO Bank;
  • Indian Overseas Bank and Punjab and Sind Bank have one vacancy each of the post of Shareholder Director; and
  • The post of the Managing Director and Chief Executive Officer (MD & CEO) fell vacant in Canara Bank last week.

Implications of the vacancies

The above findings make it amply clear that every PSB is functioning with truncated management boards. Vacancies identified above comprise between 30-50% of the board strength in each PSB. The posts of workmen and officer employee Directors are intended to give representation to internal bank staff so that they may bring their day-to-day expertise to the Board for arriving at decisions, especially with regard to giving out loans, in a well thought out manner. While only four vacancies in these two categories are a legacy from the UPA Government, the remaining 20 are from the NDA-II and NDA-III.
It is not as if the Nationalised Banks (Management and Miscellaneous Provisions) Scheme, 1970 (the Scheme) does not contain guidance for the purpose of filling up these vacancies. Chapter II of the Scheme provides for a clear procedure for inviting nominations from the employees unions and officers’ associations to fill up positions of the Workmen Employee Directors and the Officer Employee Directors respectively. There are clearly laid down procedures for identifying the appropriate Union or association that is entitled to make these nominations. 

There is also a clear procedure for certifying the Union or Association as the appropriate one for making these nominations. If the verification process is not completed, the Union Government has the power to nominate an employee and an officer as the Director of the Bank. Similarly, there are clear provisions in the Scheme for the Union Government to appoint non-official Directors as per prescribed specialisations. Nevertheless, there is a significantly large number of vacancies on the management Boards of all PSBs.
The All India Bank Employees’ Association submitted a memorandum to the Union Finance Minister, in September 2021, drawing her attention to 91 vacancies of Director posts under various categories. A scanned copy of AIBEA’s letter is in the 2nd attachment below. The only solace is that the number of vacancies has come down by about 30% in 2023, but that is not enough as more than a third of the Director’ posts remain vacant today, as the findings above demonstrate.

Gender representation on PSB boards requires urgent attention as there is no dearth of eligible and qualified women candidates

Last year, the All India Bank of Maharashtra Employee Federation moved the High Court at Bombay seeking directions to be issued to the Union Government and the Bank of Maharashtra to appoint Workmen Employee Directors to the latters’ Board. The Court has issued notice to the Respondents and the proceedings are going on. The outcome of this litigation is awaited. The Writ Petition related documents are in the 3rd attachment below.

Pulin Nayak Committee’s recommendations

In May 2014, the Pulin Nayak Committee to Review Governance of Boards of Banks in India made the following recommendations in its report to fill up the PSB Board vacancies:
“Recommendation 5.5: It is feasible and vital that in Phases 1-3 the selection process is initiated in good time to complete the appointments approval before the expiry of tenures of the incumbents. Delays presently occur because of vigilance clearance. It is recommended that this clearance be conducted only at the stage when candidates are short-listed, and not resumed after the Selection Committee recommends the candidate for appointment.”

Further, according to the April 2021 instructions issued by RBI, the Audit Committee of every commercial bank including PSBs must be constituted as follows:
“4. The ACB shall be constituted with only non-executive directors (NEDs). The Chair of the board shall not be a member of the ACB. The ACB shall meet with a quorum of three members. At least two-thirds of the members attending the meeting of the ACB shall be independent directors. The ACB shall meet at least once in a quarter. The meetings of the ACB shall be chaired by an independent director who shall not chair any other committee of the Board. The Chair of the ACB shall not be a member of any committee of the board which has a mandate of sanctioning credit exposures. All members should have the ability to understand all financial statements as well as the notes/ reports attached thereto and at least one member shall have requisite professional expertise/ qualification in financial accounting or financial management [e.g., experience in application of accounting standards and practices, including internal controls around it].”

As stated above, the Non-Official Director (Chartered Accountant) is the Chairperson of the PSB’s Audit Committee. With such a large number of vacancies on PSB Boards, it is but obvious the Audit Committees would not be able to function according to the management norms laid down.


Whenever one reads news reports of hundreds of thousands crores worth of loans going bad year after year, banks writing off loans, borrowers turning wilful defaulters, the launch of debt recovery proceedings at various fora, the value of instruments and things pledged as collateral security for loans depreciating in value inexplicably, the commencement of bankruptcy proceedings in relation to high volume borrowers, etc. etc., one wonders, where does the private citizen who deposits her/his hard earned money in PSBs figure in this scheme of things. Political parties of every hue that find themselves in the Opposition at different points of time, allege that the phenomenon of crony capitalism encouraged by the Government of the day is responsible for the huge drain of public resources out of PSBs.
To add insult to injury, taxpayer funds are deployed to grease the wheels of the State’s loan recovery proceedings. Yet, citizen depositors whose hard earned savings are the source of all lending operations of banks, both public and private, do not have any representation on their Boards. I have learnt that there are no functional depositors associations anywhere in the country either. 

In the absence of mobilised bargaining power, the people who finance banks directly (through our savings) and indirectly (when the Government recapitalises PSBs using the money we pay as taxes), remain mute spectators. It is high time depositors brainstorm on coming together to apply pressure on the banking system to work according to the established law, rules, regulations and guidelines. 

Financial inclusion must include this aspect also in addition to opening the no frills JanDhan Yojana bank accounts. The first step is to demand that all vacancies in PSBs be filled up in accordance with the letter and spirit of the legal procedures that have been laid down and the law be amended to institute a credible mechanism for appointing representatives of depositors on the management boards of all Banks.
The issue of gender representation on PSB boards also requires urgent attention as there is no dearth of eligible and qualified women candidates in the banking and allied services sector. As there is no reliable data about the social background of the current Directors of PSB Boards, we have not attempted an analysis based on criteria such as their religion and caste status. 

Perhaps these questions are best raised in Parliament to avoid dodgy replies that the Finance Ministry, RBI and PSBs themselves furnish when RTI applications are filed seeking such personal information despite their immense public importance. Government cannot be oblivious of the need to represent societal diversity on the management boards of PSBs.
I am grateful to Dr Devidas Tuljapurkar, Joint Secretary, AIBEA for educating me about these matters. I am also grateful to Citizens for India — a group of concerned citizens who discuss these public interest matters on Zoom, every Saturday evening, out of their growing concern about the manner in which things seem to be turning out, day after day.


Disclaimer: The foregoing analytical findings and discussion are true to the extent of the accuracy of the data published on FSIB’s website. In case of any doubt please contact FSIB for clarifications.

*Director, Commonwealth Human Rights Initiative, New Delhi. This article is based on CHRI’s latest research findings with regard to the vacancies on the boards of public sector banks in India. This is in continuation of CHRI’s endeavours to press for greater transparency in the functioning of these banks. For more information click here, here and here




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