The Centre plans to appoint a commercial banker as chairman and managing director of the Industrial Development Bank of India, once the present incumbent, P P Vora, retires in September.

The government is in the process of constituting a search committee for the appointment of the new chief.

The term of the current CMD will come to an end on September 30.

"The Centre is planning to look for a commercial banker as the financial institution is being converted into a bank. It is also looking at offering a market-related remuneration for the new chief," industry sources said.

IDBI insiders will have the choice to apply for the top post. The senior most executive director of the institution is J N Godbole whose term will come to an end in February 2005. The next in terms of seniority is A K Doda whose tenure will end in November 2006.

If the committee is looking for a candidate with at least a two-year tenure, Godbole may not qualify as he will have less than two years of residual service left after Vora retires.

Sources added that the Parliamentary panel is likely to recommend the merger of IDBI and IDBI Bank, as it would need to have the network of branches to tap retail deposits.

However, the panel is likely to ask IDBI to allocate certain percentage of its resources every year into long-term finances.

The government had for the first time issued an advertisement calling applications for the post of the IDBI chief after the former CMD, G P Gupta, stepped down on January 31, 2001.

The selection committee at that time consisted of former banking secretary Devi Dayal and former Reserve Bank of India deputy governor S P Talwar.

However, there was a delay in the selection process and Vora was appointed as the CMD on September 4, 2001.

The Parliamentary standing committee on finance is looking into the IDBI (Transfer of Undertaking and Repeal) Bill, 2002.

The Bill, which seeks to corporatise IDBI and transform it into a bank, also provides for a special exemption from maintaining the stipulated statutory liquidity ratio for five years. The Bill was referred to the committee in December 2002.