Private banks must have two wholetime directors: RBI

MUMBAI: The RBI has mandated private sector banks to have at least two whole-time directors in addition to the MD & CEO. RBI has said that banks that do not have two executives as directors will have to submit proposals for the same within four months.
According to the central bank, the requirement of two WTDs has become imperative given the growing complexity in the banking sector.
“Establishment of such a team may also facilitate succession planning, especially in the background of the regulatory stipulations in respect of tenure and upper age limit for MD & CEO positions,” RBI said.
The requirement of WTDs takes into account the MD & CEO as whole-time directors. This means that banks which do not have an executive director would have to promote or appoint a senior banker as a WTD.
RBI has left it to the boards of banks to decide on the number of WTDs, taking into account factors such as the size of operations, business complexity, and other relevant aspects.
Banks which do not already have the enabling provisions regarding appointment of WTDs in their Articles of Association must apply to RBI for the necessary approvals immediately, the central bank said.