The Reserve Bank of India (RBI) on October 26, 2023, issued a notification regarding the Appointment of Whole-Time Director(s).
Given the growing complexity of the banking sector, it becomes imperative to establish an effective senior management team in the banks to navigate ongoing and emerging challenges. The establishment of such a team may also facilitate succession planning, especially in the background of the regulatory stipulations with respect to tenure and upper age limit for Managing Director and Chief Executive Officer (MD&CEO) positions.
To address these issues and challenges, banks are advised to ensure the presence of at least two Whole Time Directors (WTDs), including the MD&CEO, on their Boards. The number of 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.
In compliance with 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) under Section 35B(1)(b) of the Banking Regulation Act, 1949, within a period of 4 months from the date of issuance of this circular.
[Notification No. RBI/2023-24/70 DOR.HGG.GOV.REC.46/29.67.001/2023-24]
