CHENNAI, Oct 11: Employee unions in the public sector insurance and banks have opposed the Indian government’s proposal to appoint private sector executives as Whole-Time Directors, Managing Directors, Executive Directors and Chairperson in those organisations.
In a statement the All India Insurance Employees’ Association (AIIEA) expressed its opposition to the government’s move.
Recently in an executive order issued by the Appointments Committee of the Cabinet, approved `revised consolidated guidelines’ for appointment of Whole Time Directors, Managing Directors, Executive Directors and Chairpersons in public sector insurance companies like the Life Insurance Corporation of India (LIC) and Public Sector General Insurance (PSGI) Companies and the Public Sector Banks including the State Bank of India.
According to AIIEA, these organisations are governed by Acts of Parliament- the LIC Act 1956, General Insurance Business (Nationalisation) Act 1972 and State Bank of India Act 1955.
Their management structures, roles and appointment processes are clearly defined in these laws.
The issuance of new guidelines without amending the enabling acts amounts to executive overreach and an undermining of parliamentary authority.
This move strikes at the very ethos of nationalisation, which ensured that banking and insurance serve the public interest rather than private profit. The revised guidelines open the door for greater private influence and eventual privatisation of these eminently successful public sector financial institutions, AIIEA said.
These would threaten the economic sovereignty of the nation apart from endangering the security of people’s savings, the union said.
Public sector banks and insurance companies have been the backbone of inclusive growth and social security. Any attempt to dilute their public character or shift control away from Parliament and the people is unacceptable, AIIEA said.
Opening the top-most positions of these vital institutions to outsiders from the private corporate sector by way of lateral entry will demoralise the officers already giving their best to these institutions and will be fraught with the possibility of disrupting internal career progression.
The AIIEA demanded the immediate withdrawal of the revised guidelines and called upon the government to uphold parliamentary procedures, public ownership and engage in transparent consultation before making any such far reaching policy changes.
Similarly the United Forum of Bank Unions (UFBU) opposes the government’s new move.
“The 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 (public sector banks),” UFBU said.
According to UFBU, in the past, even deputation of IAS officers to SBI top management proved a failed experiment, owing to lack of domain expertise, disconnect with banking ethos and internal resentment.
Reopening such gates under new nomenclature amounts to the same policy error, UFBU said.
“Moreover, outsider appointment without parliamentary oversight amounts to executive privatisation of statutory institutions, endangering financial sovereignty and public trust,” UFBU said.
The UFBU demands the government to keep in abeyance the revised guidelines in dispute and set up a joint stakeholder committee to review the leadership appointment frameworks and refer the entire policy to the Parliamentary Standing Committee on Finance. (UNI)
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