The RBI has instructed banks to ensure the presence of at least two Whole Time Directors (WTDs), including the MD & CEO, on the boards of banks. As per the RBI, the number of WTDs shall be decided by the Board of the bank by taking into account factors such as the size of operations, business complexity, and other relevant aspects.
Further, RBI has said that banks lacking two executives in directorial roles must present proposals for the appointment within a four-month timeframe. “Given the growing complexity of the banking sector, it becomes imperative to establish an effective senior management team in the banks to navigate ongoing and emerging challenges. 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 Managing Director and Chief Executive Officer (MD & CEO) positions,” the RBI has said in a statement.