NEW DELHI: The RBI has issued a new circular on the inclusion of MPs and MLAs on the board of public sector banks. According to the circular, members of Parliament and MLAs or local bodies such as municipal corporations will no longer be able to join the board of public sector banks. Candidates for the post of Board Members in Public Sector Banks are not a member of any bank, RBI, any financial institution, the insurance company or any other bank's non-financial holding company (Commercial Bank, State Bank of India Co-operative Bank and Regional Rural Bank) should be.
Those involved in rent-buying, financing, money lending, investment, and para-banking activities will not be considered for appointment as directors on the Board of public sector banks. However, investors of such institutions will not be disqualified for appointment as Directors who do not hold the post of Managerial Control, the RBI said.
The RBI further said that in addition, the person shall not be elected or re-elected on the Board of the Public Sector Bank if he has served as a former Director on the Board of a Bank, Financial Institution, or Insurance Company for six years. Whether it is consistent or from time to time. The RBI may have taken this step to curb the involvement of political people on the bank's board.
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