Private banks must have 2 whole-time directors: RBI

In addition to the MD and CEO, private sector banks are required by the RBI to have at least two full-time directors. According to the RBI, banks without two executives on their board of directors must submit proposals for the same within four months.

The central bank claims that because the banking industry is becoming more complex, having two WTDs is now essential.

“Creating such a group could help with succession planning as well, particularly considering the regulatory requirements regarding the length of service and maximum age for MD and CEO roles,” the RBI stated.

The CEO and MD are considered full-time directors under the WTD requirement. This implies that senior bankers would need to be appointed or promoted to the position of WTD by banks without an executive director.

The RBI has delegated the task of determining the number of WTDs to the bank boards, who will consider pertinent factors like the scale of operations and business complexity.

According to the central bank, banks that do not currently have the enabling provisions regarding the appointment of WTDs in their Articles of Association must apply to RBI right away for the required approvals.