RBI asks private banks to have at least two whole-time directors, including MD and CEO
The RBI said in a circular that given the growing complexity of the banking sector, it becomes imperative to establish an effective senior management team to navigate the ongoing and emerging challenges.
The Reserve Bank of India on Wednesday asked private banks and wholly-owned subsidiaries of foreign banks to ensure at least two Whole Time Directors (WTDs), including the Managing Director and Chief Executive Officer (CEO), on their boards to facilitate succession planning.
The RBI said in a circular that given the growing complexity of the banking sector, it becomes imperative to establish an effective senior management team to navigate the ongoing and emerging challenges. "Establishment of such a team may also facilitate succession planning, especially in the background of the regulatory stipulations in respect of tenure and upper age limit for Managing Director and Chief Executive Officer (MD & CEO) positions," it said.
The RBI asked banks to ensure the presence of at least two Whole Time Directors, including the MD and CEO, on their boards, to address issues and challenges.
The number of Whole Time Directors should be decided by the board of the bank by taking into account factors such as the size of operations, business complexity, and other relevant aspects.
"In compliance to these instructions, banks that currently do not meet the minimum requirement...Are advised to submit their proposals for the appointment of WTD(s)... Within a period of four months from the date of issuance of this circular," the circular said.
It further said banks, which do not already have the enabling provisions regarding appointment of Whole Time Directors in their Articles of Association, may first seek necessary approvals from the RBI, expeditiously, so as to be in a position to comply with the requirements under these instructions.
"While ensuring compliance to the above instructions, careful consideration shall also be given to meet the requirements under other applicable statutory/regulatory provisions," it summed up.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Top 5 Defence PSU Stocks: Investors buying 1 unit of top PSU defence stock a month made Rs 40,299.40 on Rs 23,003.25 investment in 1 year
Highest Temperature in Delhi: Minister asked for confirmation whether Delhi temperature reached 52.3 degrees; here's how IMD responded
Central Railways' 63-hour mega block to hit Mumbai local train services, check dates and other details
Gold and Silver rate today (May 30, 2024): Precious metal futures trade in red; yellow metal near Rs 72,000, white metal falls by nearly Rs 1,500
07:42 PM IST