RBI Directs Banks To Appoint At Least Two Whole-time Director

The Reserve Bank of India has instructed banks to strengthen their senior management by appointing at least one full-time director in addition to the managing director on the board.

The regulator has set a four-month timeframe for the submission of proposals for such appointments.

"In light of the increasing intricacies of the banking sector, it is crucial to establish an effective senior management team within the banks to navigate both existing and emerging challenges," stated the RBI in a communication addressed to all private sector banks and wholly-owned subsidiaries of foreign banks on Wednesday.

The RBI further emphasised that forming such a team could facilitate succession planning, given the regulatory requirements regarding tenure and upper age limit for MDs and CEOs, which is set at 70 for private banks.

"In order to tackle these issues and challenges, banks are advised to ensure the presence of at least two whole-time directors (WTD), including the MD & CEO on their boards. The exact number of WTDs should be determined by the board of the bank, taking into account factors such as the scale of operations, business complexity, and other relevant considerations," explained the RBI.