RBI fixes the tenure of top functionaries in a private sector bank
Part of: GS Prelims and GS-III – Banking
In news
The RBI has fixed the tenure of MD, CEO and whole-time director (WTD) in a private sector bank at 15 years and prescribed the maximum age of 70 years for such functionaries.
Key takeaways
These directives form part of the instructions issued by the RBI with regard to the chair and meetings of the board, composition of certain committees of the board, age, tenure and remuneration of directors, and appointment of the WTDs.
The RBI would also come out with a Master Direction on Corporate Governance in banks in due course.
The post of the MD & CEO or WTD cannot be held by the same incumbent for more than 15 years.
Thereafter, the individual will be eligible for re-appointment as MD & CEO or WTD in the same bank, if considered necessary and desirable by the board, after a minimum gap of three years, subject to meeting other conditions.
It added that during this three-year cooling period, the individual shall not be appointed or associated with the bank or its group entities in any capacity, either directly or indirectly.
Also, the maximum age limit for chairman and non-executive directors has been fixed at 75 years.
