New Delhi: The Reserve Bank of India (RBI) may examine the proposal to reappoint Uday Kotak as a non-executive director on the board of Kotak Mahindra Bank after his term ends in December, the Mint reported quoting a person familiar with the matter.
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In the e-voting that ended 20 April 2023, about 99 per cent of the 10,026 voting shareholders of Kotak Mahindra Bank voted in favour of appointing Uday Kotak as a non-executive, non-independent director on the board after he steps down as the managing director and chief executive officer.
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RBI approval is not required for the appointment of non-executive directors on a bank’s boards; the primary responsibility of ensuring whether these directors meet the fit-and-proper criteria resides with the bank’s board.
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However, the central bank can intervene if it feels the appointment fails to meet its fit-and-proper criteria.
Promoters who are managing directors and chief executives or whole-time directors (WTDs) cannot continue for more than 12 years, as per RBI’s April 2021 guidelines on corporate governance in banks.
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But the tenure could be extended to 15 years at the discretion of RBI.
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“While examining the matter of re-appointment of such MD and CEOs or WTDs within the 12/15 years period, the level of progress and adherence to the milestones for dilution of promoters’ shareholding in the bank shall also be factored in by the Reserve Bank,” it said.
