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RBI Fixed Bank’s MD and CEOs Tenure at 15 years

Published on April 28, 2021
Current Context: The Reserve Bank of India (RBI) has revised rules in its circular titled ‘Corporate Governance in Banks- Appointments of Directors and Constitution of Committees of the Board’.
RBI Fixed Bank’s MD and CEOs Tenure at 15 years
  • As per the changes in the rules, RBI has fixed the tenure of MD and CEOs or Whole Time Directors (WTD) of banks to 15 years.
  • The rules are applicable for the banks like private sector banks, SFBs and wholly-owned subsidiaries of foreign banks. The rules are not applicable for foreign banks operating as branches in India.
  • As per the rules, MD, CEO or WTD who is also a promoter or shareholder cannot serve the post for more than 12 years.
  • The RBI has also announced that the upper age limit for MD, CEO or WTD is retained at 70 years.
  • The maximum age limit for chairman and non-executive directors (NED) is fixed at 75 years. The total tenure of a NED, continuously or otherwise, on the board of a bank, is not allowed to exceed 8 years. After completing 8 years on the board of a bank the person may be considered for re-appointment only after a minimum gap of three years.
  • During the three-year cooling period, the individual cannot be appointed or associated with the bank or its group entities in any capacity, either directly or indirectly.
  • Static Part: 
    • HQ of RBI: Mumbai
    • Governor of RBI: Shaktikanta Das

Question: 

Q.1 RBI has fixed the tenure of MD and CEOs or Whole Time Directors (WTD) of banks to ____?
a. 10 years
b. 12 years
c. 8 years
d. 15 years
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