UFBU opposes opening appointment of top-level posts in banks, insurance companies

From the United Forum of Bank Unions(UFBU),representing nine trade unions of officers and workmen across all banks, they wish to convey their unequivocal and strongest protest against the recent executive orders issued by the Appointments Committee of the Cabinet (ACC) on October 4^th, 2025, approving “revised consolidated guidelines” for appointment of Whole-Time Directors (WTDs), Managing Directors (MDs), Executive Directors (EDs), and Chairpersons in Public Sector Banks(PSBs) including State Bank of India(SBI),and Public Sector Insurance Companies including Life Insurance Corporation of India (LIC) and non-life insurance companies

UFBU through a press statement said that these orders, issued without any amendment to the enabling statutes - namely the State Bank of India Act, 1955 ,the Banking Companies (Acquisition and Transfer of Undertakings) Acts,1970 & 1980, and the Life Insurance Corporation Act, 1956 - constitute a serious legal and constitutional transgression, and amount to a de facto privatization of leadership in statutory public institutions.

Public Sector Banks including SBI are not merely financial institutions; they signify national trust, serving every section of society and anchoring financial inclusion. These are statutory and important public financial institutions and their leadership carries a sovereign and fiduciary responsibility to the people of India, not merely a corporate mandate. Diluting this statutory responsibility by importing private-sector executives risks undermining the Bank’s public character, their constitutional accountability and the public ethos and values that have guided these Banks since their inception. The top management positions of these institutions must reflect the public character of these Banks, uphold transparent and auditable criteria, and preserve institutional memory developed through decades of public service.

By authorizing lateral entry of private-sector Executives into statutory leadership positions, removing APAR-based evaluation, and introducing HR-agency assessments, these guidelines alter the public character, accountability framework, and legislative intent underlying the nationalization of banks and the State Bank of India Act, 1955, that too without any Parliamentary amendment or consultation.

The State Bank of India Act,1955 and the Banking Companies Acts (1970/1980) explicitly vest appointment powers with the Central Government in consultation with the Reserve Bank of India (for banks) or Insurance Regulatory and Development Authority (for insurance), within a framework of public accountability, statutory discipline, and parliamentary oversight, said the statement.

The statement added that by introducing lateral entry of private-sector Executives, removing APAR-based merit evaluation, and employing private HR agencies for “behavioral assessment” and selection based on “interaction”, the ACC guidelines have materially altered the appointment frame work created by Parliament. Such alteration cannot be made by executive instruction; it requires legislative amendment and parliamentary debate.

Under Constitutional framework and under Articles 73 and 77, executive actions of the Union must conform to law made by Parliament. Without amendment to the enabling statutes, the executive has no competence to alter the structure of appointment or qualification of statutory office- bearers of PSBs and SBI, said UFBU.

They also claimed that it is dangerous precedent–from public mandate to Corporate control

This unilateral policy shift converts public-sector leadership roles into open-market appointments, thereby dismantling the historic model of career-based succession and institutional continuity in PSBs.

The UFBU reiterates that this is not a policy adjustment but a structural assault on India’s public-sector edifice. Public-sector banking and insurance are not commodities for experimentation; they are constitutional instruments of economic justice and national sovereignty. The public-sector banking system is the backbone of India’s economic sovereignty. We will not allow its statutory character to be diluted or privatized through executive backdoors.