The government will soon lay down the "exceptional circumstances" under which the finance minister can use his power to approve relaxation of the experience criteria required for appointing a chairman and managing director of a public sector bank or insurance company.

These circumstances have not been elaborated till now. The power to approve any relaxation to norms like minimum two years' residual service and one year experience in feeder grade vests with the FM. The latest move is aimed at bringing in more transparency and instill a sense of fair play in such matters.

In addition to this, a recent committee of secretaries meeting chaired by the Cabinet secretary also decided to prescribe a term of five years (subject to superannuation) for the post of Life Insurance Corporation chairman and CMDs of public sector general insurance companies.

The finance ministry's insurance division has proposed a term of five years for these posts with a review of performance after three years.

Any extension of tenure beyond the stipulated five years will need approval of the appointments committee of the Cabinet.

The banking division has also decided to lay down the criteria for appointment of a CMD out of selected candidates in a particular bank in as much detail as is possible.

The eligibility criteria for selection of bank executive directors and CMDs has also been set at two years of residual service and one year of completed service.

The committee of secretaries also decided against accepting a recommendation that said selection by the appointment board should ordinarily be accepted by the government.

The government has also decided to form a search committee consisting of the finance, economic affairs and personnel secretaries as well as experts from the financial sector to select a person for the post of Insurance Regulatory and Development Authority chairperson.

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