NEW DELHI: No central bank nominee will have to be at the boards of public sector banks (PSBs) to avoid "any conflict of interest", RBI Governor Urjit Patel on Tuesday stated while briefing a parliamentary panel over Nirav Modi fraud case.
The central bank is discussing the matter of RBI nominee director with the Finance Ministry, he told the Parliamentary Standing Committee on Finance, according to resources who have been present within the briefing.
Patel as of late appeared before the panel, whose contributors come with former Prime Minister Manmohan Singh, to temporary it on mounting non-performing assets (NPAs), fresh frauds in banks, and other problems.
He categorically stated that the principle and collective accountability to contain frauds within the banks rests with its board, according to the resources.
Emphasising at the director's role, Patel in a written reply to the panel stated the main role of any director at the bank's board, together with nominee director, is to make certain that the bank is controlled successfully and professionally.
Patel was responding to the queries of the MPs at the governance problems in ICICI Bank and Axis Bank, and in addition questions related to USD 2 billion fraud at the Punjab National Bank perpetrated through diamond trader Nirav Modi.
The proposals coming before the board and its committees are in step with standard banking practices, pointers of the federal government, RBI and aren't violative of any regulation, he stated.
"RBI nominee directors should be distanced from management committee of the board (which takes credit decisions), to avoid any conflict of interest and the RBI nominee should not be on the boards of the PSBs," he famous.
He additional stated that the separation of the put up of Chairman from that of the CEO/MD, within the nationalised banks, has been achieved so as to strengthening the independence of the board and embellishing its oversight over the management.
Highlighting the will for implementation of Nayak committee record, he stated it'll cross long way in making improvements to role of the boards of the nationalised banks.
The central bank is discussing the matter of RBI nominee director with the Finance Ministry, he told the Parliamentary Standing Committee on Finance, according to resources who have been present within the briefing.
Patel as of late appeared before the panel, whose contributors come with former Prime Minister Manmohan Singh, to temporary it on mounting non-performing assets (NPAs), fresh frauds in banks, and other problems.
He categorically stated that the principle and collective accountability to contain frauds within the banks rests with its board, according to the resources.
Emphasising at the director's role, Patel in a written reply to the panel stated the main role of any director at the bank's board, together with nominee director, is to make certain that the bank is controlled successfully and professionally.
Patel was responding to the queries of the MPs at the governance problems in ICICI Bank and Axis Bank, and in addition questions related to USD 2 billion fraud at the Punjab National Bank perpetrated through diamond trader Nirav Modi.
The proposals coming before the board and its committees are in step with standard banking practices, pointers of the federal government, RBI and aren't violative of any regulation, he stated.
"RBI nominee directors should be distanced from management committee of the board (which takes credit decisions), to avoid any conflict of interest and the RBI nominee should not be on the boards of the PSBs," he famous.
He additional stated that the separation of the put up of Chairman from that of the CEO/MD, within the nationalised banks, has been achieved so as to strengthening the independence of the board and embellishing its oversight over the management.
Highlighting the will for implementation of Nayak committee record, he stated it'll cross long way in making improvements to role of the boards of the nationalised banks.
No RBI nominee should be on banks' boards, says Governor Urjit Patel
![No RBI nominee should be on banks' boards, says Governor Urjit Patel]()
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June 13, 2018
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