RBI Requests Federal Bank For New CEO Candidates
The Reserve Bank of India (RBI) has instructed Federal Bank, a private sector lender, to present a revised proposal featuring a minimum of two fresh candidates for the Managing Director and Chief Executive Officer positions.
Earlier, on 6 October 2023, the bank had requested a one-year extension for Shyam Srinivasan, whose current three-year term as MD & CEO concludes on 22 September 2024.
However, on 4 January, the RBI directed the bank to submit a new proposal incorporating at least two new candidates for the CEO role.
In response, the bank's board of directors, during its meeting on 5 January, acknowledged the RBI's directive and stated they would proceed as advised.
Srinivasan, who assumed the role of MD and CEO of Federal Bank on 23 September 2010, has served for a decade through multiple re-appointments.
According to an RBI discussion paper in June 2020, there was a proposal to restrict the tenure of bank promoters as CEOs or Whole Time Directors (WTDs) to 10 years for individuals from the promoter group and 15 years for those outside the promoter group.
Following this guideline, Srinivasan would have the opportunity to continue as CEO until 2025. Additionally, the RBI suggested capping the age limit for bank CEOs/WTDs at 70 years.
