UFBU Opposes Lateral Entry of Private Sector Executives in SBI, PSBs, and LIC — Calls It “An Attack on Public Character

The United Forum of Bank Unions (UFBU) — representing nine major trade unions of officers and workmen across all banks — has strongly opposed the recent executive orders issued by the Appointments Committee of the Cabinet (ACC) on October 4, 2025, which open the top leadership positions in State Bank of India (SBI), Public Sector Banks (PSBs), and Public Sector Insurance Companies including Life Insurance Corporation of India (LIC) and non-life insurers to private sector candidates.

Terming the move as an “attack on the public character of national institutions”, UFBU has demanded immediate withdrawal of these revised guidelines.

‘Executive Privatisation of Leadership in Statutory Public Institutions’

According to UFBU, the ACC’s “revised consolidated guidelines” for appointments of Whole-Time Directors (WTDs), Managing Directors (MDs), Executive Directors (EDs), and Chairpersons have been 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

• The Life Insurance Corporation Act, 1956

• The UFBU stated that this constitutes a serious legal and constitutional transgression, amounting to a de facto privatisation of leadership in statutory public institutions.

Violation of Statutory and Constitutional Provisions

The statement points out that under Articles 73 and 77 of the Constitution, the Union Government’s executive powers must conform to laws made by Parliament. Therefore, any alteration in the qualification or appointment process of statutory office bearers requires a legislative amendment, not merely an executive order.

The SBI Act, 1955 (Sections 19 & 20) and LIC Act, 1956 (Sections 4, 5 & 22) explicitly stipulate that appointments are to be made by the Central Government in consultation with the Reserve Bank of India or the Insurance Regulatory and Development Authority of India (IRDAI), within a framework of public accountability and parliamentary oversight.

UFBU Warns Against Dilution of Public Mandate

The UFBU stressed that PSBs and LIC are national institutions that symbolise public trust and play a critical role in financial inclusion, rural credit, and national development.

“By importing private-sector executives into these statutory institutions, the Government risks undermining their public ethos, fiduciary accountability, and sovereign responsibility to the people of India,” the statement said.

It added that top management positions must reflect the public character of these institutions and preserve the institutional memory built through decades of service in the public sector.

Concerns Over Transparency and Merit

The forum also criticised the removal of APAR-based evaluation and its replacement with behavioural and competency assessments by private HR agencies.

UFBU warned that such subjective evaluations could invite bias, opacity, and cronyism, replacing objective performance records with discretionary assessments lacking transparency and auditability.

Impact on Morale and Institutional Continuity

Opening the highest posts to private-sector executives while excluding career public-sector officers, UFBU cautioned, would demoralise the internal cadre and disrupt succession planning.

“The move will replace lifelong public servants and nation-building bankers with transient corporate technocrats who lack the public service ethos that defines these institutions,” the statement noted.

UFBU’s Key Demands

UFBU has urged the Government to:

• Keep the revised ACC Guidelines (dated 04.10.2025) in abeyance pending detailed review.

• Constitute a Joint Stakeholder Committee comprising representatives from DFS, RBI, FSIB, UFBU, and independent jurists.

• Refer the entire policy to the Parliamentary Standing Committee on Finance.

• Ensure that all future reforms in PSBs and insurance companies are placed before Parliament and subjected to stakeholder consultations.

• Preserve parity and internal succession within PSBs and SBI, ensuring leadership emerges from within the public-sector banking cadre.

• ‘We Will Not Allow Public Institutions to Be Privatised Through Executive Backdoors’

Concluding the statement, UFBU declared: “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 privatised through executive backdoors.”

About UFBU

The United Forum of Bank Unions (UFBU) is an umbrella body of nine national-level trade unions — AIBEA, AIBOC, NCBE, AIBOA, BEFI, INBEF, INBOC, NOBW, and NOBO — representing officers and employees across all public sector banks in India.