Industry Odisha Bureau, Sep 28: Eight PSU banks have no non-executive chairman, some for years. RBI’s new governance framework takes effect on 1 October. Executives still run the banks, but independent board oversight faces questions.
Eight of India’s 11 public sector banks, excluding SBI, lack a non-executive chairman. The figures come from Financial Services Institutions Bureau (FSIB) data. Each bank still has an executive head in its MD and CEO. The gap lies elsewhere, in independent leadership of the board. The timing matters because a new RBI governance framework applies from 1 October.
Some seats empty for years
Some vacancies are recent, while others stretch back several years. Bank of Maharashtra has had no non-executive chairman since 22 April 2015. That gap followed the separation of the chairman and managing director posts. Indian Bank’s post has been vacant since 14 August 2018. Bank of Baroda’s seat has been empty since March 2024. Punjab National Bank, Canara Bank and Union Bank of India followed in November 2025.
Only three banks currently have a serving non-executive chairman. M.R. Kumar chairs Bank of India, and Srinivasan Sridhar chairs Indian Overseas Bank. Aravamudan Krishna Kumar holds the role at UCO Bank. SBI is structured differently, with an executive chairman leading the lender.
Management continues, oversight differs
At most PSU banks, the MD and CEO is the top executive. RBI guidelines allow the managing director to preside over board meetings when the chairman is absent. Yet chairing a meeting is not the same as independent board leadership. The chairman-MD separation aimed to create checks between board and management. When the top executive presides, that separation may not fully operate.
RBI rules sharpen the focus
The RBI issued its new governance framework for banks on 14 July. It gives the chairperson primary responsibility for setting the board’s agenda. The board bears ultimate responsibility for strategy, financial soundness, personnel, governance and risk. The guidelines do not say who performs the chair’s role during a vacancy.
The independence question
PSU bank boards carry an unusual mix of members. They include managing directors, executive directors, government nominees and independent directors. The government is the controlling shareholder, yet the banks are also listed. Their boards answer to both banking and securities-market regulatory frameworks.
Vivek Iyer of Grant Thornton Bharat said independent directors are usually few on these boards. A vacant chair, he warned, could dilute board independence. Iyer described a vacant PSU bank chair as generally a lead indicator of weak governance. Such governance concerns remain expert assessments, not findings of failure at any bank.
Why seats stay empty
The FSIB recommends candidates for top roles at PSU banks, financial institutions and state-owned insurers. Veinu Nehru Dutta of FyneHand Consultants said the process can exceed six to seven months. Lengthy procedures can contribute to gaps, though they may not explain every vacancy.
There is no public government explanation for the current vacancies. Former finance secretary Subhash Chandra Garg believes the Centre is not prioritising appointments. The Department of Financial Services and the eight banks did not respond to queries.
Structure matters
The affected banks are not leaderless. Their MDs and CEOs continue to run day-to-day operations. The open question concerns the separate layer of oversight above management. With RBI’s framework taking effect this week, that question carries fresh weight.
