RBI updates fit & proper norms for PSB boards

MUMBAI: Members of Parliament, state legislatures, or local bodies such as municipal corporations cannot be on the boards of public sector banks. Also, partners of chartered accountancy firms engaged as statutory central auditors at any public sector bank cannot join the boards of these banks, Reserve Bank of India (RBI) said in an updated circular on fit and proper criteria in state-run lenders.Candidates for the post of board members in public sector banks should also not be a member of the board of any rival bank, or the RBI or any financial institution, insurance company or nonfinancial holding company of any other bank that includes commercial banks, State Bank of India, a 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 said.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, or insurance company under any category for six years — continuously or intermittently. “The candidate should not be engaging in the business of stock broking,” RBI said.Candidates between 35 and 67 years on the cut-off date for the submission of nominations for election, with graduation as the minimum educational 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 be engaged in activities that might result in a conflict of business interests with the bank,” RBI said.

from Economic Times https://ift.tt/335p6TU