NEW DELHI: Kotak Mahindra Bank managing director and CEO Uday Kotak may have to relinquish his position if a discussion paper floated by the Reserve Bank of India (RBI) is implemented.
The paper, titled ‘Governance in Commercial Banks in India’, was released by the central bank on Thursday.
The paper proposed to limit the tenure of bank chief executive officers (CEOs) and whole time directors (WTDs) to 10 years if the person is from the promoter group, and 15 years if from non-promoter group.
Uday Kotak is among the longest-serving CEOs in the private sector banking space, helming Kotak Mahindra Bank since 2003.
Another banking veteran Aditya Puri, CEO of HDFC Bank, will retire by the end of this year.
RBI has effected changes at the top level in private sector lenders like Axis Bank, Yes Bank and IndusInd Bank.
The discussion paper by the RBI bats for greater power for bank boards, separation of ownership from management and setting up of proper risk management strategy.
“The objective of the discussion paper is to align the current regulatory framework with global best practices while being mindful of the context of the domestic financial system,” the RBI had said.
The paper said that growing size and complexity of India’s financial system underscores the significance of strengthening governance standards in banks.
Stakeholders can send their comments on the discussion paper by July 15, 2020.
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