Allahabad HC upholds SBI’s merit-based MMGS-II placement policy.

Clearing the marks required for a higher post does not by itself guarantee an SBI officer placement in that post, the Allahabad High Court has held, ruling that the bank can assess an officer's suitability for a future leadership role before giving such placement.

Court upheld SBI's decision to restrict placement in the MMGS-II grade to the top 10% of a batch on the basis of merit, saying the cap did not take away any vested right of trainee or probationary officers and instead brought objectivity to the bank's exercise of discretion.

A division bench of Justices Saumitra Dayal Singh and Swarupama Chaturvedi delivered the judgment on August 21, allowing SBI's appeal against a November 2024 order of a single judge. The single judge had held the December 16, 2020 Training and Confirmation Policy arbitrary and void insofar as it applied to the 2019 batch, and had directed SBI to place the affected officers in MMGS-II under the earlier policy, with notional benefits.

What Did The Earlier SBI Policy Provide?

The dispute concerned Trainee Officers of SBI's 2019 batch, who had been appointed through promotion after working as Assistants and clearing an all-India examination. Their appointment letters said their service would be governed by the SBI Officers' Service Rules, 1992 and that confirmation after training would be under the "extant policy".

At the time, SBI's April 23, 2019 policy provided for continuous assessment during training. Officers securing at least 50% marks in the overall assessment, or 45% for SC/ST and PwD candidates, were to be confirmed in JMGS-I. Officers scoring 75% or more, or 70% for SC/ST candidates, were to be considered for placement in MMGS-II.

The officers who approached the court argued that they had crossed the 75% threshold and therefore were entitled to MMGS-II placement under the policy that was in force when they were appointed.

But the division bench rejected that interpretation.

Why Did The High Court Say 75% Marks Were Not Enough?

Court drew a distinction between confirmation in service and placement in MMGS-II.

It noted that Rule 16 of the SBI Officers' Service Rules provides that an officer would be confirmed after satisfactorily completing training. However, its first proviso separately provides that the Bank “may” confirm and give placement in MMGS-II based on the officer's merit and suitability for a future leadership role.

The bench said that merely being confirmed therefore did not automatically give an officer a right to the higher grade.

The distinction was also evident in the language of the 2019 policy, court said. While Clause 5G(i) stated that officers meeting the lower threshold “shall be confirmed”, Clause 5G(ii) said officers meeting the 75% threshold “shall be considered” for MMGS-II.

“Rules of grammar exist and are actively and purposefully employed” to convey different meanings and effects, court observed, holding that the two expressions could not be treated alike.

Court ultimately held that “minimum merit (at training), alone would never be enough to claim placement/fitment in MMGS-II".

Why Did SBI Introduce The 10% Cap?

Court examined the experience of earlier batches before upholding the new policy.

For the 2017 batch, 807 of 816 Trainee Officers and 1,445 of 1,592 Probationary Officers had been placed in MMGS-II. For the 2018 batch, 1,497 of 1,524 Trainee Officers were placed in the grade. Court noted that these placements were made on the basis of the minimum merit threshold under the old policy.

SBI subsequently received feedback that a majority of officers placed in MMGS-II lacked sufficient experience and maturity. Many had not handled positions of responsibility in branches and were finding it difficult to cope with middle-management responsibilities, court noted. This was also said to have resulted in stress and a risk of developing long-term negativity among the officers.

The bank considered either doing away with MMGS-II placement altogether or imposing a cap. It ultimately chose the latter to preserve an element of competitiveness among officers.

The December 16, 2020 policy therefore said that the top 10% of Probationary Officers and Trainee Officers, based on the highest assessment scores, would be considered for MMGS-II, subject to other requirements. The placement was to be considered on an all-India basis rather than Circle-wise.

Court found this approach to be an objective and transparent way of assessing suitability for future leadership roles.

Did SBI Change The Rules Midway?

The bench said no.

It held that the new policy did not alter the selection of the officers or their right to confirmation in JMGS-I. The 75% threshold also continued to determine who would fall within the zone of consideration for MMGS-II. What changed was that, among those eligible, the bank could select the highest-ranking 10% on merit.

Court also rejected the argument that applying the new policy to the 2019 batch was retrospective.

It pointed out that the 2018 Trainee Officers had completed their training and assessment before the December 16, 2020 policy came into force. In contrast, the 2019 batch was still undergoing assessment when the policy was introduced. Its assessment cut-off was March 17, 2021, and confirmation was due on June 16, 2021.

For the same reason, the bench found no hostile discrimination between the 2018 and 2019 batches, saying there was a “rational criteria to distinguish” between them.

Court accordingly held that the impugned policy was consistent with the SBI Rules, did not change the rules of the game midway and was not retrospective. It allowed SBI's special appeal, dismissed the writ petition and made no order as to costs.

Case Title: The State Bank of India and 5 others vs. Priyanshu Arya and 39 others

Order Date: August 21, 2026

Bench: Justices Saumitra Dayal Singh and Swarupama Chaturvedi

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