Master Direction on ‘Fit and Proper’ Criteria for Elected Directors on PSBs
The Reserve Bank of India (RBI) has issued a Master Direction outlining the ‘fit and proper’ criteria for elected directors on the boards of Public Sector Banks (PSBs).
The direction applies to State Bank of India and nationalized banks.
Criteria for Elected Directors
The criteria for elected directors include:
- Age: No specific age limit mentioned
- Educational qualification: Not specified
- Experience and field of expertise: Relevant experience and expertise in the field
- Disqualifications: Certain disqualifications apply, such as insolvency, criminal convictions, etc.
- Tenure: Maximum tenure of 8 years, with a maximum of 2 terms of 4 years each
- Professional Restrictions: Certain professional restrictions apply, such as not holding office in other banks
- Track record and integrity: The director should have a good track record and integrity
The banks shall obtain certain information from the elected director, including a declaration of their fitness and propriety.
The banks shall also verify the information provided by the elected director and obtain a report from the RBI.
In case of any doubt or dispute, the RBI’s decision shall be final.
This Master Direction repeals the earlier directions on the subject.
Chat with the Master Direction: