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RBI proposes to shore up bank boards:
News:
- The Reserve Bank of India has proposed a stronger board for banks for improving governance and stringent norms for CEOs and wholetime directors (WTDs).
- The norms are applicable to private, foreign and public sector banks.
- The new norms will come into effect within six months after being placed the RBI’s website or April 1, 2021, whichever is later.
Norms proposed by RBI:
- Board members should not be a member of any other bank’s board or the RBI.
- They should not be either a Member of Parliament or State Legislature or Municipality or other local bodies.
- Board of directors of a bank should not be less than six and not more than 15, with a majority being independent directors.
- The board shall meet at least six times a year and at least once every 60 days.
- It is suggested that the appointment, re-appointment and termination of wholetime directors and chief executive officers should be with the previous approval of RBI.
- The upper age limit for CEO and WTDs of banks is suggested at 70 years, which is a norm for private bank at present.
- Banks will be free to set a lower age for such appointments.