Eight of India's 11 public sector banks, excluding State Bank of India (SBI), currently lack a non-executive chairman, with some vacancies persisting for years. According to reports from Mint, the vacancies range from 8 years at Indian Bank to 11 years at Bank of Maharashtra, with recent vacancies at Bank of Baroda, Punjab National Bank, Canara Bank and Union Bank of India. The current FSIB database shows Canara Bank, Punjab National Bank and Union Bank of India have been without a non-executive chairman since 7 November 2025, while Bank of Baroda's position became vacant from 1 March 2024.
The issue assumes greater significance with the new Reserve Bank of India governance framework for banks, issued on 14 July and effective from 1 October. As reported by Mint, the new guidelines state the chairperson has primary responsibility for setting the board's agenda, while the board bears ultimate responsibility for business strategy, financial soundness, key personnel decisions, governance and risk management. However, the new RBI guidelines are silent on a fundamental question: in the absence of a non-executive chairman, who performs the chairperson's governance role at these banks.
According to Vivek Iyer, partner and national leader of financial services risk advisory at Grant Thornton Bharat, effective board governance is driven by a non-executive independent chairman with the presence of independent directors. As reported by Mint, given the large representation in boards by executive directors, managing directors and government nominees, the presence of independent directors is usually slim. With a vacant chair, board independence could be diluted, Iyer cautioned, adding that a vacant chair for a public sector bank is generally a lead indicator for weak governance.
While there is no publicly available government explanation for the eight current vacancies, former finance secretary Subhash Chandra Garg believes that the government is not prioritizing filling vacancies. According to Mint, Garg stated that 'for the Centre, governance and filling of vacancies can wait. It seems it does not matter'. The FSIB recommends candidates for senior leadership roles such as whole-time directors and non-executive chairpersons on the boards of PSU banks, financial institutions, and state-owned insurers.
The appointment process itself can be time-consuming, with Veinu Nehru Dutta, senior managing partner at executive search firm FyneHand Consultants, noting that the whole process can take more than 6-7 months and internal succession planning can also take its own course of time, leading to large vacancies. As reported by Mint, former bank chairman cited that governance expectations can differ between private- and public-sector banks, given the latter's more complex framework of government ownership, government nominees and public accountability. Only Bank of India, Indian Overseas Bank and UCO Bank have a serving non-executive chairman, while SBI has an executive chairman leading the country's largest lender.
