RBI directs private banks to have at least two whole time Directors on boards

Mumbai : The RBI has directed all private sector banks and wholly-owned subsidiaries of foreign banks to ensure the presence of at least two Whole- Time Directors, including the MD & CEO, on their boards.

The number of whole time Directors (WTDs) shall be decided by the board of the bank by taking into account factors such as the size of operations, business complexity, and other relevant aspects, states the RBI circular issued on Wednesday.

“In compliance to these instructions, banks that currently do not meet the minimum requirement as above are advised to submit their proposals for the appointment of WTD(s) within a period of four months from the date of issuance of this circular,” it added.  

Those banks which do not already have the enabling provisions regarding appointment of WTDs in their Articles of Association may first seek necessary approvals expeditiously, so as to be in a position to comply with the requirements under these instructions.

While ensuring compliance to the above instructions, careful consideration shall also be given to meet the requirements under other applicable statutory/regulatory provisions, the circular states.