Possibly, in a move to gauge the role that shareholder promoters play in influencing the day-to-day functioning of the lenders, an expert committee appointed by the Reserve Bank of India (RBI) has sought minutes of board meetings from banks.
The 8-member panel set up by RBI and chaired by former Axis Bank Chairman P J Nayak to review governance of board of banks could also recommend that shareholder promoters give up their executive positions at banks. The committee is set to review who should be appointed on the board, what they should discuss and the process to be followed for discussions.
Besides, the panel has been empowered to review the regulatory compliance requirements of banks’ boards in India, and estimate that what could be intellectual and where requirements needed to be raised. It’s also supposed to analyze representation on bank boards to see whether the boards have appropriate mix of capabilities and necessary independence to govern the institution. Additionally, the panel is expected to examine the working of bank boards, including whether adequate time is devoted to issues of strategy, growth, governance and risk management.
Seperately, in a move that could spark a storm in bank boardrooms, RBI has asked the committee set to examine the recommendations of the Financial Sector Legislative Reforms Commission (FSLRC) relating to capacity building in the banking sector under the Chairmanship of Executive Director of RBI G. Gopalakrishna, to consider whether there ought to be a certification process for the appointment of bank directors.
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