This proposal, which had been under discussion for several months, aimed to provide greater stability to India’s largest public sector financial institutions.
"The file moved, but the extension of the retirement age for PSBs is now on the back burner. The matter is closed as of now," one of the sources said.
Currently, the retirement age for the SBI chairperson is 63, while it is 60 for PSB managing directors.
The proposed changes would have allowed senior executives to remain in office longer, promoting continuity in decision-making at the highest levels of India’s banking sector.
Top appointments in PSBs, including SBI, are typically for a three-year term, with the option for extension.
SBI Chairman Dinesh Khara, who took on the role in October 2020 after serving as managing director of global banking and subsidiaries, had his term extended by the Appointments Committee of the Cabinet until August 2024. He turns 63 on August 28.
The shelved proposal also included a plan to raise the retirement age of the Life Insurance Corporation of India (LIC) chairperson from 62 to 65 years, similar to the proposed extension for the SBI chairperson.
Both LIC and SBI play pivotal roles in the financial sector, and the proposed extensions were seen as a way to retain experienced leadership and ensure continuity.