The Reserve Bank of India (RBI) on April 26, 2021 issued certain guidelines on tenure of MD, CEO of private financial institutions.
What are the guidelines?
- As per guidelines, the post of Managing Director (MD) and Chief Economic Officer (CEO) MD or Whole Time Director (WTD) cannot be held by the same incumbent for more than 15 years.
- The individual will be eligible for re-appointment as MD & CEO or WTD in the same bank, if considered necessary and desirable by the board, after a minimum gap of three years, subject to meeting other conditions.
- During this three-year cooling period, the individual shall not be appointed or associated with the bank or its group entities in any capacity, either directly or indirectly.
- The upper age limit for MD & CEO and WTDs in private banks would continue to be 70 years. Within the overall limit of 70 years, as part of their internal policy, individual bank’s Boards are free to prescribe a lower retirement age for the WTDs, including the MD&CEO.
- This circular is not applicable to foreign banks operating as branches in India.
