RBI appointed a Committee to Review Governance of Boards of Banks in India
RBI has constituted an Expert Committee to Review Governance of Boards in India, which will be chaired by PJ Nayak, former Chairman and CEO of Axis Bank.
Reserve Bank of India on 20 January 2014 constituted an Expert Committee to Review Governance of Boards in India. The expert committee will be chaired by PJ Nayak, the former Chairman and CEO of Axis Bank and includes other eight members namely S. Raman, Shubhalakshmi Panse, Pratip Kar, Joydeep Sengupta, Harsh Vardhan, Somasekhar Sundaresan, J. Sagar and Krishnamurthy Subramanian.
The terms of reference of the Committee would be
• To review the regulatory compliance requirements of banks’ boards in India
• To judge what can be rationalised and where requirements need to be enhanced
• To examine the working of banks’ boards including whether adequate time is devoted to issues of strategy, growth, governance and risk management and will also review central bank regulatory guidelines on bank ownership, ownership concentration and representation in the board
• To analyse the representation on banks’ boards to see whether the boards have the appropriate mix of capabilities and the necessary independence to govern the institution, and to investigate possible conflicts of interest in board representation, including among owner representatives and regulators. In this regard to also assess and review the ‘fit and proper’ criteria for all categories of directors of banks, including tenor of directorship
• To examine board compensation guidelines, and any other issue relevant to the functioning of banks’ boards and the governance they exercise
The Committee is expected to submit its report within three months from the date of its first meeting.
Before this committee, the RBI formed a similar panel in 2002 under the chairmanship of AS Ganguly and seeked it tp provide suggestions to find ways to make the role of board members more effective. The drafted report was mainly applicable for private banks