RBI draft governance code undermines bank chief executive officers: IBA

Says move to make board executive in nature will not fly; some independent directors expected to move on

The Indian Banks’ Association (IBA) has told the Reserve Bank of India (RBI) that its draft code on governance will dilute the position of the corner-room occupant under Section 10B of the Banking Regulation (BR) Act, 1949. The BR Act states the incumbent will be entrusted with the management of the whole bank.

The stage is set for prolonged talks between the banking lobby group and the central bank as the draft is categorical that chief executive officers (CEOs) are not to have a seat on key committees of the board — remuneration and nomination, audit committee, and risk management. Key