Bank boards should prevent overdominance by a few members: RBI

Reserve Bank of India Governor Shaktikanta Das asked bank boards to democratise discussions and prevent excessive dominance by few members.

In his address at the conference for directors of urban cooperative banks (UCBs), Das said the quality of board discussions should be free and frank because the idea of cooperation is based on the idea of democracy.

“The (UCB) board members are elected and the underlying principle of the functioning of the co-operative bank is democracy. The discussions on the board should be democratic and transparent. Everybody should get a chance to speak and there should not be an over dominance or excessive dominance by one or two members of the board or by the chairman or the vice chairman or a group of directors,” Das said.

“We have seen this in big commercial banks also, and wherever we have seen this, we have told banks that this is not the way…one or two directors cannot excessively dominate,” he said.