New Delhi, July 11: The Reserve Bank of India (RBI) has cleared the appointment of former Vysya Bank chairman I Sadasiva Gupta as the managing director of the Bank of Rajasthan (BoR). By doing so, it has revised its earlier decision to appoint State Bank of India (SBI) chief general manager SK Sapru who was among the three names suggested by the bank board.

The other name suggested by the bank board was that of former Oriental Bank of Commerce (OBC) chairman and managing director SK Soni. Sapru was the third choice.

Earlier, the BoR management was taken by surprise with the RBI making a preference for a candidate who was in third in the race, although the latter was empowered to pick up any candidate out of the panel of three suggested by the board.

The bank board urged the RBI to reconsider its decision about the appointment of Sapru as bank managing director in preference to Soni and Sadasiva Gupta. The Reserve Bank argued that neither Soni nor Sadasiva Gupta were available for the job. The bank management, however, managed to secure the approval of Sadasiva Gupta.

The RBI withdrew the appointment of Sapru in favour of Gupta. Sadasiva Gupta had successfully headed one of the largest private sector banks in the country. Gupta took the reigns of the Vysya Bank at a time when its high-profiled chairman Ramesh Gelli left the bank to launch Global Trust Bank (GTB).

The post of BoR managing director fell vacant with NM Chordia expressing his desire against extension. Chordia was appointed in February 1995 and his two-year term ended in February 1997. He indicated to the board in writing that he was not interested in extension.

Hence, the bank submitted a panel of three names to the RBI for approval. In the meantime, the RBI had asked Chordia to continue to function as managing director for four months.