RBI's draft framework advocates for independent members in SRO boards

The struggle to get top-flight IDs on their boards found indirect mention in the first-of-its-kind interaction between the RBI's brass and the boards of state-run banks and private banks

Mint Road’s draft omnibus framework for self-regulatory organisations (SROs) has it that at least a third of an entity’s board of directors, including the chairperson, must be independent. Also, they should have no association with the category or class of regulated entities (REs) for which it has been set up. In one fell swoop, not only is the demand for independent directors (IDs) in the financial services space set to go up manifold, but it raises a concern: Just how many will put up their hands to come on the board of an SRO?

Let’s take banks and IDs.

The struggle