The Reserve Bank of India on Wednesday requested private banks and wholly owned subsidiaries of overseas banks to guarantee at least two Whole Time Directors (WTDs), together with the MD & CEO, on their boards to facilitate succession planning.
Given the rising complexity of the banking sector, it turns into crucial to set up an efficient senior administration workforce to navigate the continued and rising challenges, the RBI stated in a round.
“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 stated.
The RBI requested banks to make sure the presence of at least two WTDs, together with the MD & CEO, on their boards, to tackle points and challenges.
The variety of WTDs needs to be determined by the board of the financial institution by bearing in mind components similar to the scale of operations, enterprise complexity, and different related points.
(*2*) the round stated.
It additional stated banks, which don’t already have the enabling provisions relating to appointment of WTDs of their Articles of Association, could first search mandatory approvals from the RBI, expeditiously.
