Reserve Bank of India (RBI) Sets New Directive for Private Banks: Two Whole-Time Directors Mandatory

Reserve Bank of India (RBI) Sets New Directive for Private Banks: Two Whole-Time Directors Mandatory

• In response to the evolving challenges and increasing intricacies within the banking sector, the Reserve Bank of India (RBI) has issued a crucial circular. This directive places the onus on private banks and wholly-owned subsidiaries of foreign banks to establish a robust senior management team. The primary objective is to effectively steer these institutions through the present and emerging obstacles.
• To address these concerns, the RBI has mandated that private banks and wholly-owned subsidiaries of foreign banks must have a minimum of two Whole-Time Directors (WTDs) on their boards. This requirement includes the presence of the MD & CEO as one of the two WTDs.
• The RBI recognizes that the specific number of WTDs should be contingent on various factors, including the scale of operations, the complexity of the business, and other relevant considerations. This affords banks the flexibility to tailor their senior management structure to their unique circumstances.

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Published date : 28 Oct 2023 04:35PM