The Reserve Bank of India (RBI) set up an 8 -member panel to review governance of board of banks and examine ‘fit and proper’ criteria for directors, including their tenure. The Committee will be chaired by former Axis Bank Chairman P J Nayak.
The panel will:
- Review the regulatory compliance requirements of banks’ boards in India, and estimate that what could be intellectual and where requirements needed to be raised.
- Analyze representation on bank boards to see whether the boards have appropriate mix of capabilities and necessary independence to govern the institution.
- Investigate possible conflicts of interest in board representation, including among owner representatives and regulators.
- Examine the working of bank boards, including whether adequate time is devoted to issues of strategy, growth, governance and risk management.
- Review central bank regulatory guidelines on bank ownership, ownership concentration and representation in the board.
The panel is set to examine board compensation guidelines, and any other issue relevant to the functioning of bank boards and the governance they exercise. The Committee is expected to submit its report within three months from the date of its first meeting.