Fit and proper criteria for Directors and CEOs of SCBs and DCCBs
Ref. RPCD. CO.RCBD. 131/13.01.03/2011-12
Position
Director (Elected
Members)
Criteria
1. The provisions of the bye-laws of the Bank, in
question and the concerned State Cooperative
Societies Act shall be adhered to by the Election
Authority in the matter.
2. A declaration as in Annex II shall be obtained
from each elected director. A special Board level
committee shall be set up by the elected Board
to satisfy itself about the information provided by
the directors in the declaration.
Professional
Director
1. There shall be at least there directors on the
Board with a minimum of five years’ work
experience in any of the following fields
i.
Accountancy
Accountant)
(Qualified
Chartered/Cost
ii.
Agriculture
(Agricultural
Graduate/Post
graduate/Agricultural Engineer)
iii.
Banking (At senior management level being
a graduate)
iv.
Finance/Economics/ Commerce / Business
Administration (CFA/Post graduate in
Economics/Commerce/
Finance/Management, MBA)
v.
Law (Law Graduate/Post graduate)
In case elected members do not possess
prescribed qualifications/experience as above, the
Board shall co-opt requisite number of professionals
with such prescribed qualifications/ experiences as
directors to ensure that there are
Chief Executive
Officer (CEO)
1. The person may preferably not be above 55
years of age at the time of appointment.
2. The person to be appointed as CEO shall be at
least be a
i.
Graduate
with
CAIIB/DBF/Diploma
Cooperative Business Management
equivalent qualification or
ii.
Chartered /Cost Accountant, or
iii.
Post graduate in any discipline
in
or
3. The person shall have at least eight years work
experience at the middle/senior level in the
banking sector Senior/Middle level for the
purpose shall be taken as the third level
(scale/cadre) onwards (i.e. excluding the first
two levels (Scales/Cadres) in the officer cadre),
or as the highest two levels (Scales/cadres)
below the level of CEO.
4. The Board of the bank in question/Selection
Committee should also undertake a process of
due diligence in respect of the person, relying on
information to be obtained from him/her as in
Annex-II, before appointment.
Appointment of CEOs in Cooperative Banks.
The Cooperative Societies Act of the State has been amended as required under
the revival package for STCCS. One of the amended provisions in the CS Act
requires that CEO of the SCB/DCCB be appointed by the Board of the Bank
concerned, and by following among other things the fit and proper criteria
prescribed by Reserve Bank of India. Depending upon whether the present
incumbents fulfill the criteria or not, policies of their parent organization and most
importantly the willingness of the Board to allow the present incumbents in their
tenure despite the CEO fulfilling the prescribed criteria the following explanation
is furnish to help the SCB/DCCB to tackle possible situations arising out of
implementation of the criteria prescribed by RBI :1)
As per the provision of the amended Act, the Board of
DCCB/SCB under obligation to appoint the CEO who fulfills
eligibility criteria prescribed by RBI.
2)
The Board may take decision on existing on existing CEOs
keeping in view the eligibility criteria prescribed by RBI and
terms and conditions of appointment of existing CEOs.
3)
If the present incumbent complies with the criteria prescribed by
RBI and the bank wants to continue with the present CEO, the
following would be required
4)
(a)
If the incumbent is an employee of the bank, no further
action is necessary.
(b)
If the present incumbent is from the Government or
another organization and the incumbent as well as the
parent employer have no objections, then the Bank may
ask the parent employer to depute the concerned
person for a fixed tenure of not less than o3 years on a
full time basis on compensation and any other terms
and conditions for such deputation set by the Bank and
the person be fully relieved from any other
responsibilities by the parent employer. The person on
deputation should not be repatriated unilaterally to the
parent organization at the latter’s decision.
If the present incumbent does not comply with the criteria
prescribed by RBI but is an employee of the Bank itself, he may
be offered voluntary retirement or another suitable position. The
Bank need to appoint a new CEO complying with RBI criteria
either as it’s employee or take a suitable person on deputation
on conditions as indicated in 3(b) above.
5)
If the present incumbent is on deputation from Government or
another organization and does not comply with the RBI criteria
or complies with RBI criteria but the concerned Bank does not
want to continue with him, then the person may be repatriated
and a new CEO fulfilling the RBI criteria appointed.
6)
The Board may be advised that new CEO is posted before
relieving the present CEO with a view to ensure smooth
functioning of the Bank. An overlapping period for handling over
the charge, as normally practiced, should be insisted.
7)
There is no need to get the approval of the RBI/NABARD for the
appointment of the CEOs. It is only to be ensured that CEOs
fulfill the “Fit & Proper Criteria” prescribed by RBI. However, the
names of the CEOs are to be reported to NABARD. A copy of
the appointment letter may be endorsed to NABARD.