Former SBI chairman, OP Bhatt on panel to hunt for new Irda chief

Former State Bank of India chairman OP Bhatt has been appointed on a panel that will assist in the search for the next chief of Insurance Regulatory and Development Authority, a move that signals Bhatt’s return to the establishment. 

Bhatt was at odds with the Reserve Bank of India on several issues when he headed the country’s largest lender from 2006 to 2011, but with the change of guard at North Block, he seems to be back in favour. 

“The finance minister himself has approved Bhatt’s name for the panel,” a finance ministry official said requesting anonymity. 

Although Irda chairman J Hari Narayan is due to retire in February, the government is keen to start the succession process early. 

Besides Bhatt, former Sebi chairman GN Bajpai,financial services secretary DK Mittal, department of economic affairs secretary Arvind Mayaram and secretary in the department of personnel and training PK Mishra have been named on the panel. 

“We have to shortlist one director from an Indian Institute of Management,” the official said. “Once that is done, we will send all the names to the appointments committee of the cabinet for approval.” 

Former chairman of Life Insurance Corporation TS Vijayan is said to be the front runner for the post of Irda chief. Vijayan, who was battling corruption allegations, was recently given a clean chit by the Central Bureau of Investigation and the finance ministry. 

During his stint at SBI, Bhatt had locked horns with RBI on teaser loans, a home loan scheme that offered lower interest rates in the first few years, and later on provisioning norms, resulting in his gradual alienation from the finance ministry then headed by Pranab Mukherjee. 

Soon after Bhatt left, SBI reported a 99% fall in profit in the quarter to March 2011, which was blamed on higher provisioning. The bank had then set aside 500 crore on outstanding teaser home loans on the directions of RBI. 

SBI had to eventually discontinue the teaser loan scheme. “Bhatt was in SBI and not SBI himself,” Pratip Chaudhuri, the current chairman of the bank had said justifying the decision. 

Some finance ministry officials say Bhatt’s vast experience could have been utilized better by the government after his retirement from SBI. 

“There are so many issues such as bank capitalisation, new licences, financial inclusion. In fact, he could have provided more teeth to the spate of circulars that the ministry issued,” one of these officials said.

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