A discussion paper of the RBI on Thursday proposed that the maximum tenure of a promoter of a bank as a wholetime director or CEO in that lender should be 10 years.
RBI said to build a robust culture of sound governance practice, professional management of banks and to adopt the principle of separating ownership from management, it is desirable to limit the tenure of the whole time directors (WTDs) or CEOs.
“Therefore, it is felt that 10 years is an adequate time limit for a promoter/major shareholder of a bank as WTD or CEO to stabilise its operations and to transition the managerial leadership to a professional management,” the RBI said in the paper on ‘Governance in commercial banks in India’.
