Major Shake-Up in Indian Public Sector Banking and Starlink’s India Entry

Digital Desk

In a significant move that could reshape India's financial landscape, the central government has decided to open top leadership positions in public sector banks and insurance institutions like the State Bank of India (SBI) and the Life Insurance Corporation (LIC) to professionals from the private banking sector. This decision, announced on October 8, 2025, marks a departure from a long-standing tradition of reserving these posts for internal officers.

The move has been met with immediate and stiff opposition from the United Forum of Bank Unions (UFBU), an umbrella group of nine banking unions. The UFBU has alleged that the government issued these new orders without making corresponding amendments to the relevant laws, such as the SBI Act of 1955, the Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980, or the LIC Act, 1956. Union representatives have labeled the step a clear shift towards privatization, arguing it was made without parliamentary consultation.

For the first time, the position of Managing Director at SBI will be accessible to candidates from the private sector. Furthermore, the Financial Services Institutions Bureau (FSIB) has been empowered to hire HR agencies to assess candidates' behavior and abilities, a process that will now form the basis of recruitment. Banking unions fear this will shatter the morale of experienced officers, eliminate opportunities for internal promotion, and negatively impact the transparency and accountability of the banking system. The UFBU has demanded an immediate stay on the decision and the formation of a joint committee including the Finance Ministry, the Reserve Bank of India, the FSIB, and bank union representatives to review the matter.

Mega Merger to Create Banking Behemoth

In a parallel development, the government is reportedly planning a mega merger between Union Bank of India and Bank of India. If this consolidation goes through, the newly formed entity is projected to have a total asset base of approximately ₹25.67 trillion, making it the second-largest public sector bank after SBI and a rival to private giants like ICICI Bank. This initiative is part of the government's broader strategy to create stronger, more efficient public sector banks by reducing overlapping functions. Reports also suggest the Finance Ministry is considering a merger between Chennai-based Indian Overseas Bank and Indian Bank, while smaller banks like Punjab & Sind Bank and Bank of Maharashtra could see future privatization.

Starlink Set for India Launch

In a major technological development, Elon Musk's satellite internet company, Starlink, is finalizing preparations to launch its services in India. According to a Business Today report, the company has established an office in a prime Mumbai location, costing around ₹23.3 crore. Public demos of the high-speed internet service are scheduled in Mumbai until October 31, 2025.

The company plans to set up gateway stations in nine locations, including Noida, Chandigarh, Kolkata, and Lucknow. If all regulatory approvals are secured, the service could be operational by January or February 2026. The initial setup cost is expected to be around ₹50,000, with monthly subscriptions starting from approximately ₹2,300. Users can expect speeds ranging from 25 Mbps in starter plans up to 225 Mbps in high-end packages, a service poised to extend internet connectivity to the country's most remote regions.