It is difficult not to sympathise with P J Nayak, who heads the UTI Bank as its chairman and managing director. The Reserve Bank of India insists that Dr Nayak cannot continue to function as chairman and managing director beyond July when his current tenure comes to an end. So, his appointment can be renewed either as the chairman or as the managing director.

The rules stipulate that non-PSU banks must split the post of chairman and managing director. This is a privilege only PSU banks enjoy! Not surprisingly and true to his character, Dr Nayak has let it be known that he has no desire to continue in the UTI Bank with a truncated designation.

Dr Nayak is a competent banker with integrity that few in the industry can match. As an Indian Administrative Service officer in the finance ministry in the early 1990s, he was reputed to be one of the finest bureaucrats in North Block.

Completing his tenure in UTI after he quit the government - and without incurring any adverse comment on his reputation - was in itself a major achievement.

He got his due in 2000, when he took charge of the UTI Bank. He steered the bank with distinction till a controversy over the extension of his five-year tenure surfaced in 2004. An attempt was made to bifurcate his post. Powerful forces were behind that move. Dr Nayak also lost no time to indicate that he was not interested in an extension if his post were to be bifurcated. In one of its rare acts of supporting an upright officer, the government intervened and there was no bifurcation.

Now that the UTI Bank board has approved Dr Nayak's extension as chairman and managing director for another two years from August 2007, the RBI has cited governance norms against Dr Nayak's continuation as CMD.

Given his commitment to values and correctness, it is almost certain that Dr Nayak will not accept any bifurcation in the post. It is also likely that he may not even like to continue in the UTI Bank even if the RBI were to modify its stance.

The larger issue here, however, is not whether Dr Nayak can be persuaded to stay back as the CMD of the UTI Bank or whether the RBI should relax its norms for an outstanding banker like Dr Nayak.

If indeed there are rules that prohibit the same person from becoming the CMD of a bank, the RBI should ensure that these are followed without fail. Rules should not be and need not be bent for anyone, even if that means the end of an outstanding officer's tenure.

What the RBI should ensure is that its rules are appropriately framed and uniformly implemented with transparency, fairness and correctness. And that is where the problem arises.

The Naina Lal Kidwai case is too fresh in one's mind. The RBI took a tough stand, and rightly so, while opposing Ms Kidwai's plans to retain a position on the board of Nestle even after being appointed as the head of HSBC in India. The central bank asked Ms Kidwai to relinquish her board position in Nestle if she wanted it to clear her appointment as HSBC head.

But Ms Kidwai had different ideas. A couple of months later, the RBI changed its stance and allowed her to retain the Nestle position as long as she ensured that the Swiss company did not have any financial transaction with HSBC India. Were the rules applied uniformly, transparently, fairly or correctly? If the RBI modified its stance in the Kidwai case, should it not also allow Dr Nayak to continue as the CMD of the UTI Bank?

This is a problem that afflicts most organisations in India. Ratan Tata was hailed by all for ushering in a system that all executive chairmen of Tata companies would retire by a certain age. Has that age criterion been followed for everyone in the Tata group?

The Delhi Metro Rail chief, E Sreedharan, has long crossed the age of retirement. But he has been given one more extension so that he can complete the second phase of the Delhi Metro project. Tarun Das of the Confederation of Indian Industry was given an extension beyond the usual retirement age because many industrialists on the management committee of the CII felt that he should be around to oversee the organisation at a difficult time of its transformation.

There are exceptions also. N R Narayana Murthy of Infosys did not pay heed to exhortations that he should extend his executive role in the company by a few more years. Once he reached the age of retirement according to the company's rules, Mr Murthy ceased to hold that position.