Key appointments overdue, financial institutions wait for PM to end policy paralysis

The paralysis on appointments that had plagued the financial sector, resulting in top financial institutions, key regulatory bodies and state-owned banks remaining headless for months, could see a course correction. With Prime Minister Manmohan Singh taking charge of the finance ministry, there are strong indications that long pending appointments could finally come through.

At present, institutions without a full-time chief include UTI, the country's oldest and biggest mutual fund company, and New India Assurance, one of the three state-owned general insurance firms. While UTI has not had a full-time chairman since February 2011, New India Assurance has been headless since last August.

UTI, which has been without a chairman since its former chief U K Sinha left to head market regulator Sebi, has just re-started the process of selecting a chairman and managing director. An earlier attempt to appoint a chairman ended after disagreement among its four shareholders over one of the applicants — Jitesh Khosla, a bureaucrat — favoured by the finance ministry. The Fund has been functioning under acting-CEO Imtaiyazur Rahman since January this year.

In the case of New India Assurance, the chairman, M Ramadoss, was suspended in August 2011 on charges of irregularities. G Srinivasan, CMD of United India Insurance, held additional charge of the company for about five months until the finance ministry appointed A R Sekar, general manager of New India, as officiating CMD in January this year. Curiously, the government had on November 25 last year, appointed A K Saxena as CMD of New India, but cancelled the appointment within an hour.

This is not all. Market regulator Sebi has been functioning with just one full-time member, with two of its full-time members having retired. The finance ministry had advertised for the posts in February this year, but is yet to take a decision.

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