RBI sets upper age limit for private bank CEOs at 70

The RBI brought relief for investors in HDFC Bank and IndusInd Bank, who have been anxious about the destiny of their celebrated chiefs who have provided massive returns in the past few years. Full-time directors of Pvt. banks can now continue up to the age of 70, in line with the Companies Act 2013. The bank boards will, nevertheless, hold the right to set a lower retirement age for officials.
RBI has been decided that the upper age limit for MD & CEO and other WTDs (Whole-Time Directors) of banks in the private sector should be 70 years, i.e.- beyond which no person should remain in the post. Within the overall limit of 70 years, individual bank’s boards are free to fix a lower retirement age for the WTDs, counting the MD & CEO, as an internal policy.
This view received further credence after the P J Nayak committee proposed a maximum age of 65 for bank CEOs. The committee, to review governance of boards of banks, had made the suggestion in its report to RBI this May.
Whilst RBI can take decision on what can be done at private banks as they are governed by the Companies Act, the Parliament has to amend the Bank Nationalisation Act to permit parallel provisions for state-run banks.

• This is the first time RBI is prescribing retirement age for Pvt. bank CEOs.
• The RBI Move aligns retirement with the Companies Act 2013
• Minimum age to become Manager is 21 years.
• Maximum age for CEOs, whole-time directors is 70.
• Age of Top Bank CEOs: Aditya Puri (MD & CEO HDFC Bank: 64 Years), Romesh Sobati (MD & CEO IndusInd Bank: 65 Years), Chanda Kochar (MD & CEO ICICI Bank: 52 Years).

Month: Current Affairs - September, 2014