industry

RBI updates fit and proper criteria for PSU bank directors


MUMBAI: Members of parliament, state legislature or local bodies like municipal corporations cannot be members of the board of public sector banks. Also, partners of chartered accountant firms which are currently engaged as a statutory central auditors at any public sector banks, cannot join the boar of these bank, Reserve Bank of India said in an updated circular on fit and proper criteria in public sector banks.

Candidates for the post of board members in public sector banks should also not be a member of the board of any rival banks, or the RBI or any financial institution, insurance company or non financial holding company of any other bank which includes, commercial banks, State Bank of India, co-operative bank or a regional rural bank.

People connected with hire purchase, financing , money lending, investment, leasing and other para banking activities will not be considered for appointment as directors on the board of a public sector bank. “However, investors of such entities would not be disqualified for appointment as directors if they do not enjoy any managerial control in them,” RBI clarified.

Also, no person can be elected or re-elected on the board of a public sector bank if he or she has served as a director in the past on the board of any bank, financial institution, insurance company under any category for six years whether continuously or intermittently.

“The candidate should not be engaging in the business of stock broking,” RBI said.

Candidates between the age of 35 to 67 years on the cut off date for the submission of nominations for election with graduate as a minimum education qualification will be considered, RBI said.

An elected director can hold office for three years and shall be eligible for re-election for a total period of six years either served continuously or intermittently. “The candidate should neither have any business connection including legal or advisory services with the concerned bank nor should be engaged in activities which might result in a conflict of business interests with the bank,” RBI said.





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