A Rare Reversal: The Demotion of a Public Sector Bank Executive Director

Key Highlights

 

In an unprecedented move, the central government has demoted Pankaj Dwivedi, Executive Director (ED) of Union Bank of India, to his previous position as General Manager at Punjab & Sind Bank. This decision marks a rare instance of a public sector bank executive director being stripped of a top post and reverted to a lower rank, raising significant questions about appointment protocols and regulatory oversight in India’s banking sector.

 

Background and Timeline

 

Pankaj Dwivedi was appointed as ED of Union Bank of India in March 2024 for a three-year term, following a long tenure as General Manager at Punjab & Sind Bank.

 

Soon after his elevation, a public interest litigation (PIL) was filed in the Delhi High Court, challenging his appointment on the grounds that it was made without the mandatory vigilance clearance—a critical regulatory requirement for such senior positions.

 

In August 2024, the Delhi High Court, led by Acting Chief Justice Manmohan, issued notices to the Centre, Central Vigilance Commission (CVC), and Dwivedi, seeking clarification on the appointment process.

 

Regulatory and Legal Issues

 

The court highlighted that the appointment contravened established norms, as it bypassed the necessary approval from vigilance authorities.

 

The Department of Financial Services, Ministry of Finance, responded by issuing a gazette notification in June 2025, cancelling Dwivedi’s appointment as ED and reinstating him as General Manager at Punjab & Sind Bank.

 

Sector Implications

 

This demotion is notable not only for its rarity but also for the message it sends about the importance of regulatory compliance and transparency in public sector appointments.

 

The case has triggered discussions about the robustness of vetting mechanisms for top banking roles and the need for strict adherence to governance protocols.

 

Industry observers note that such actions, though disruptive, may reinforce accountability and restore public trust in the sector’s leadership selection process.

 

Sources: Times of India, Economic Times, CNBC-TV18