Government explores raising the retirement age for state-owned bank leaders

Government officials are actively considering the possibility of extending the retirement age for chairmen and managing directors of state-owned banks, which collectively oversee more than 60 per cent of the total assets within the banking system, a government source revealed on Saturday.

The current proposal on the table involves increasing the age limit for the chairman of the country's largest state-owned lender, the State Bank of India (SBI), from 63 to 65 years. Likewise, the age limit for managing directors of other government-owned banks could be raised from 60 to 62 years.

It's important to note that SBI operates under distinct legislation compared to other government-owned banks.

Not a final decision yet

The official emphasised that the plan remains in the deliberation phase and a final decision has yet to be reached. Due to ongoing discussions, the official chose to remain anonymous.

The retirement age for leaders of state-run banks is notably lower than that of their counterparts in the private sector, who retire at the age of 70 and consequently enjoy longer tenures. Industry analysts frequently point to this discrepancy as a potential reason for the lack of consistency in strategic direction observed within state-owned financial institutions.

Typically, chiefs of state-run banks are appointed for a three-year term, with the possibility of extension based on their performance.

In a separate development, it has been disclosed that the government is considering granting a 10-month extension to the current SBI Chairman, Dinesh Khara, whose retirement is expected in October.