According to sources in the finance ministry, the appointments board formally sent in its recommendation last week favouring Janakiraman for the top slot in SBI. Vaidya, who is at present heading SBI associates and subsidiaries in the capacity of a deputy managing director (DMD), is slated to take over as the chairman of Nabard.

Vaidya, the senior most among DMDs, retires in October 2000 while Janakiraman hangs up his boots in February 2000.

The board has also recommended State Bank of Mysore managing director SR Iyer for the post of a managing director in SBI. The second MD post is likely to be occupied by State Bank of Bikaner & Jaipur managing director S Mukherji. "The board will clear Mukherji's namein its next meeting," sources said.

With Janakiraman's name being formally cleared for the chairman's post, this will be one of the rare instances of supersession at the top level in SBI. Earlier, Dipankar Basu bagged the top slot ahead of PV Subbaharao and V Mahadevan -- both of whom were implicated in the securities scam. Prior to that, RK Talwar had got the nod ahead of N Ramanand Rao and RCD Nambier superseded HC Sarkar. While Rao was sent to head Central Bank of India, Sarkar became the chairman of Bank of India.

Former finance secretary Montek Singh Ahluwalia "interviewed" Vaidya, Janakiraman and Iyer in July. According to sources in the ministry, Vaidya's lack of exposure in global banking and banking operations is being held against him. "He has excellent exposure in treasury operations as he efficiently managed Discount & Finance House of India before taking over as State Bank of Travancore MD. However, that is not enough to steer the bank into the next millennium," sources said.

Janakiraman'sexperience in banking operations includes a stint as chief general manager (CGM) in Ahmedabad and general manager (GM), banking operations department. Besides, he headed the SBI representative office in Tehran.

Iyer and Mukherji, who will take over as MDs over the next few months, are at present heading SBM and SBBJ, respectively. While Iyer's previous posting was as CGM, Mumbai circle, Mukherji was heading DFHI.

According to the plan, Janakiraman will first be made MD in November when present MD OP Setia steps down and subsequently take over as chairman in December. Simultaneously, Iyer will step in to fill the MD's post falling vacant following Janakiraman's elevation to the top slot. Mukherji is likely to be made the second MD in February when MP Radhakrishnan steps down.

Vaidya will be sent to Nabard before Janakirman is made MD, sources said. According to SBI insiders, Vaidya may refuse to take up the new assignment. "There have been instances when senior executives refuse to shift out of SBI. Forinstance, when PG Kakodkar was heading SBI Mutual Fund, he got the offer of heading Bank of India which he declined to take," sources said.

Kakodkar subsequently bagged the chairman's post after Basu stepped down. However, Vaidya's case is different as the appointments board has already identified the next chairman.