The Reserve Bank of India (RBI) has decided to put an age limit on managing directors (MD), chief executive officers (CEOs) and other whole-time directors (WTDs) of private sector banks, it said on Tuesday.
It took the decision to bring the norms in line with provisions of the new Companies Act. RBI said the provisions of the Companies Act, 2013 [Section 196(3)] prescribes that ‘no company shall appoint or continue the employment of any person as Managing Director, Whole-Time Director or Manager who is below the age of 21 years or has attained the age of 70 years’.
“In view of the above, it has been decided that the upper age limit for MD & CEO and other WTDs of banks in the private sector should be 70 years, i.e. beyond which nobody should continue in the post. Within the overall limit of 70 years, individual bank’s Boards are free to prescribe a lower retirement age for the WTDs, including the MD & CEO, as an internal policy,” RBI said on Tuesday.
The provisions do not cover independent directors or those who are not WTDs.
As a result it does not bar banking veterans such as Deepak Parekh of HDFC and K V Kamath of ICICI from continuing to be engaged with the top two private lenders in the country. Parekh is attaining the age of 70 next month while Kamath will do so in 2017.
(Edited by Joby Puthuparampil Johnson)