The Reserve Bank of India (RBI) has ordered Urban Cooperative Banks (UCBs) not to create any honorary positions or titles at the board level, such as Chairman Emeritus and Group Chairman, as this creates a shadow authority.

The RBI has given these banks a year to eliminate these posts. While such positions or titles may imply certain benefits or rights, such as access to all board materials and participation in board or committee meetings, enforcing liabilities or duties on such persons may be difficult, according to the RBI. "Such positions may be perceived as creating conflicts of interest as well as creating a parallel or shadow authority inhibiting the lawfully constituted board's effective and independent operation in the best interests of all its stakeholders," it stated.

UCBs are instructed not to create any honorary positions at the board level or bestow non-statutory titles, and to delete any such existing positions or titles within one year of the date of this circular, according to the circular.

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