Pankaj Dwivedi & Union Bank: Demotion, Legal Challenges & Implications

Introduction

In a rare and significant move, Pankaj Dwivedi, who was appointed as Executive Director (ED) of Union Bank of India on March 27, 2024, has been demoted to the position of General Manager (GM) at Punjab & Sind Bank. This surprising reversal was initiated by the Government of India via a gazette notification on June 24, 2025. The change comes amid a Delhi High Court case questioning the legality of his appointment due to lack of vigilance clearance and a pending public interest litigation (PIL) that included allegations of sexual harassment and corruption from 2018.

This 1,000‑word article delves into Dwivedi’s career trajectory, the reasons for his demotion, regulatory and legal implications, stakeholder reactions, and what lies ahead for him and Union Bank.

Career and Appointment Background

Professional Profile

• Pankaj Dwivedi holds an MBA from Symbiosis, Pune, is a CAIIB certified banker, and has completed executive programmes at IIM Raipur and a leadership programme at IIM Bangalore.

• With over 30 years of banking experience, he held key roles at Punjab & Sind Bank, including General Manager handling corporate credit, retail lending, forex, and treasury .

• On March 27, 2024, Dwivedi was elevated to the post of Executive Director at Union Bank of India for a 3‑year term .

Reasons Behind the Demotion

Legal and Regulatory Concerns

Governmental Action

• A gazette notification issued by the Department of Financial Services canceled his ED appointment and reverted him to his previous GM role at Punjab & Sind Bank .

• This case is among the first publicly noted instances of an ED-level demotion, reflecting heightened vigilance in public sector bank (PSB) compliance 

Stakeholder Perspectives & Institutional Impacts

Market and Shareholder Reaction

• Following the announcement, Union Bank’s stock rose about 2.5% on June 24, 2025, likely due to market relief over restored compliance .

Bank Governance

• The incident has sparked debate over appointment protocols, CVC vetting, and regulatory oversight in PSBs. Firms like Union Bank may revise their vetting mechanisms.

Professional Consequences for Dwivedi

• His career reversion underscores reputational impact. As GM, his scope is narrower, and future promotions will likely depend on the outcome of court proceedings.

Key Facts About the Demotion

1. DWIVEDI’S TENURE: ED role commenced March 27, 2024; demoted June 24, 2025.

2. VIOLATION: Appointment made without required vigilance clearance—contrary to government rules.

3. LEGAL CHALLENGE: PIL filed in August 2024 over harassment complaints and procedural lapses.

4. GOVERNMENT ACTION: Ministry of Finance formally canceled his ED role via gazette notification.

5. CAREER IMPACT: Reverted to General Manager at Punjab & Sind Bank—his prior position.

Wider Implications for PSB Appointments

Governance & Transparency

This high-profile reversal sends a strong message: No appointment is immune to scrutiny. It highlights the critical importance of:

• Vigilance vetting before high-level postings

• Adherence to due process and norms in senior assignments

• Accountability frameworks within government and financial institutions

Legal Precedents

The Delhi High Court’s involvement signifies that judicial oversight in senior bank appointments is no longer peripheral. PILs and HC reviews may become more common tools to enforce transparency.

Internal Review Processes

PSBs are expected to reinforce internal compliance departments, ensure background and vigilance checks are thorough, and audit even senior-level promotions for regulatory adherence.

Timeline of Events

Conclusion & Forward Outlook

The demotion of Pankaj Dwivedi from a premier executive post to GM underscores an evolving landscape in PSB governance. It illustrates how legal activism, regulatory protocols, and institutional discipline are increasingly converging. Key takeaways include:

• Mandatory vigilance clearance is indispensable for high-ranking bank roles.

• Public interest litigation can effectively challenge executive appointments.

• PSBs must enhance vetting processes and internal accountability mechanisms.

Looking Ahead

• Delhi HC hearings will determine whether the appointment lacked genuine merit or procedure.

• Dwivedi’s future trajectory will hinge on the court’s ruling and subsequent organizational reviews.

• Union Bank must ensure its leadership pipeline remains robust, transparent, and compliant to preserve institutional credibility.

This incident signals a potential shift in PSB regulatory culture—an era where boardroom decisions face not just bureaucratic, but judicial scrutiny, emphasizing ethical and procedural integrity.