Public Sector Bank Boards in Disarray: Over 75 Vacant Posts Signal Governance Breakdown

• 44 full-time Executive Directors (including 11 MD & CEOs and 33 EDs)
• 24 Government and RBI nominees
• 23 Shareholder Directors (mostly retired LIC or bank officials)                    

The data reveals prolonged vacancies in key board-level roles that are meant to ensure diversity and accountability in governance with nearly one in two positions vacant in some banks. The Audit Committees statutorily mandated to supervise internal financial compliance are non-functional in some banks due to the absence of expert directors.

Several Public Sector Banks have been unable to constitute fully representative boards. Positions meant for employee and officer directors remain unfilled across institutions, despite statutory provision.

Below given data is from 12 PSBs that reveals over 75 key board-level vacancies, including MDs, employee directors, and independent experts. 

Image: Canara Bank (5), Central Bank of India (6) and Indian Bank (5) have 16 vacancies, chiefly in non-official director slots (including Chartered Accountant experts), plus officer/workmen employee director seats and non-executive chairmanships.

Image: Indian Overseas Bank (4), Punjab & Sind Bank (7) and Punjab National Bank (6) show 17 open board posts, from non-official director (CA) roles to officer and workmen employee director positions and vacant non-executive chair seats.

Image: State Bank of India (7), UCO Bank (4) and Union Bank of India (6) together face 17 vacancies, including non-official directors, officer & workmen employee directors, independent chairs and the MD & CEO post at Union Bank.

Devidas Tuljapurkar, Joint Secretary of AIBEA and General Secretary of Maharashtra State Bank Employees Federation said to Kanal, “The Boards have become entirely MD-driven. Stakeholder directors representing employees, depositors, farmers, and MSMEs (Micro, Small and Medium Enterprises) have been missing for over a decade. The whole purpose of democratic, balanced governance is defeated.”

Tuljapurkar further warned, “This is policy paralysis at its peak. The government, as the owner of these banks, is directly responsible. And the RBI, as a regulator, has chosen convenient silence.”

As a result, many boards function with limited input from grassroots or stakeholder-specific voices. Independent oversight is also affected in institutions where Chartered Accountant category seats and non-official directorships remain vacant.

In some cases, roles such as depositor or agricultural representatives have not seen appointments for over a decade. The continued absence of such voices means that representation of key stakeholder groups is structurally incomplete.

“There’s no accountability in this setup,” Tuljapurkar adds. “This governance vacuum is not accidental, it is engineered. That insulates decision-makers and alienates the people they serve.”

This prolonged non-appointment trend has led unions and governance observers to raise concerns regarding the intent and urgency of the appointing authorities. Given that these institutions operate on public funds and cater to vulnerable populations, the absence of stakeholder representation on their boards continues to attract scrutiny.

The answer may lie in the desire to centralize authority and dilute resistance. With MDs running the boards, decisions can be top-down and uniform, avoiding the dissent or scrutiny that stakeholder directors bring.

Unions are now demanding:

• Immediate appointment of employee and officer directors.
• Filling of all sectoral representative positions.
• Restoration of non-official independent directorships.
• Functioning Audit Committees in every PSB board.

Stakeholder representation in bank boards is not merely a statutory requirement, it plays a critical role in shaping inclusive policies and operational accountability. Prolonged vacancies in these roles may weaken the participatory governance model envisioned for India’s public sector banks.