The Ministry of Finance notified that the Reserve Bank of India (RBI) allowed Uday Kotak CEO of Kotak Mahindra Bank to be the Non-executive Director of Infrastructure Leasing and Financial Services Limited ( IL & FS ).
As per sub-clause (i) of clause (c) of sub-section (1) of section 10 of the Banking Regulation Act, 1949 banking company is prohibited to be managed by any person who is a director of any other company not being a subsidiary of the banking company or a company registered under section 25 of the Companies Act, 1956.
The proviso to the sub-clause (i) of clause (c) of sub-section (1) of section 10 of the said Act provides that the prohibition in the said sub-clause shall not apply in respect of any such director for a temporary period not exceeding three months or such further period not exceeding nine months as the Reserve Bank of India may allow.
section 53 empowers the Central Government, on the recommendation of the Reserve Bank of India, to declare, by notification in the Official Gazette, that any or all of the provisions of the said Act shall not apply to any banking company or institution or to any class of banking companies either generally or for such period as may be specified.
The Central Government, on the recommendations of the Reserve Bank of India, had considered it necessary to grant exemption to Kotak Mahindra Bank Limited from the application of sub-clause (i) of clause (c) of sub-section (1) of section 10 of the Banking Regulation Act, 1949 in so far as it relates to its Managing Director and Chief Executive Officer, Uday Kotak being on the Board of Infrastructure Leasing and Financial Services Limited as its Non-executive Director, for a further period of one year with effect from the 3rd day of October 2019 and issued a notification number S.O. 3584(E), dated the 1st October 2019, published in the Gazette of India, Part II, Section 3, sub-section (ii), dated the 1st October 2019, to that effect and further extended the exemption for one year by a subsequent notification dated the 23rd September 2020 and the exemption so granted is expiring on the 2 October 2021.
The Central Government, on the recommendations of the Reserve Bank of India, has considered it necessary to grant the said exemption to Kotak Mahindra Bank Limited for a further period of six months with effect from the 3rd day of October 2021
“In exercise of the powers conferred by sub-section (1) of section 53 of the Banking Regulation Act, 1949, the Central Government, on the recommendation of the Reserve Bank of India, hereby declares that the provisions of sub-clause (i) of clause (c) of sub-section (1) of section 10 of the said Act shall not apply to Kotak Mahindra Bank Limited in so far as it relates to its Managing Director and Chief Executive Officer, Shri Uday Kotak being on the Board of Infrastructure Leasing and Financial Services Limited as its Non-executive Director, for a further period up to the 2nd day of April 2022,” the notification said.
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