The Reserve Bank of India (RBI) issued the directions banning the Member of Parliament or State Legislature or Municipal Corporation or Municipality or other local bodies from being the Directors in Urban Co-operative Banks.
The person shall not be engaged in any other business or vocation or beholding the position of a Member of Parliament or State Legislature or Municipal Corporation or Municipality or other local bodies. They should also not be a director of any company other than a company registered under section 8 of the Companies Act, 2013 or be a partner of any firm which carries on any trade, business, or industry, the RBI while issuing the directions said.
The RBI notified that the tenure of the managing director (MD)/WTD shall not be for a period more than five years at a time subject to a minimum period of three years at the time of first appointment, unless terminated or removed earlier, and shall be eligible for re-appointment.
The performance of the MD/WTD shall be reviewed by the Board annually. Also, the post of the MD or WTD cannot be held by the same incumbent for more than 15 years.
It is said that the MD/WTD should be a post graduate or have qualifications in finance discipline. He or she could be either chartered/cost accountant, MBA (finance) or have a diploma in banking or cooperative business management.
The person should not be below 35 years of age or more than 70 years.
Regarding the tenure of appointment, it said the person can be appointed for a maximum of five years and will be eligible for re-appointment.
However, it said the MD or WTD will not hold the post for more than 15 years. After that, the person, if necessary, maybe re-appointed after a three-year cooling period.
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