The Reserve Bank of India (RBI) on Wednesday asked private banks and wholly-owned subsidiaries of foreign banks to ensure at least two Whole Time Directors (WTDs), including the MD & CEO, on their boards to facilitate succession planning. Given the growing complexity of the banking sector, it becomes imperative to establish an effective senior management team to navigate the ongoing and emerging challenges, the RBI said in a circular.


"Establishment of such a team may also facilitate succession planning, especially in the background of the regulatory stipulations in respect of tenure and upper age limit for Managing Director and Chief Executive Officer (MD & CEO) positions," it said.


The central bank asked banks to ensure the presence of at least two WTDs, including the MD & CEO, on their boards, to address issues and challenges. The number of WTDs should be decided by the board of the bank by taking into account factors such as the size of operations, business complexity, and other relevant aspects.


"In compliance to these instructions, banks that currently do not meet the minimum requirement...are advised to submit their proposals for the appointment of WTD(s)... within a period of four months," the circular said. It also said banks, which do not already have the enabling provisions regarding appointment of WTDs in their Articles of Association, may first seek necessary approvals from the RBI, expeditiously. 


On the other hand, the RBI has said retail investors can subscribe to Floating Rate Savings Bonds, 2020 (Taxable) through its Retail Direct portal. RBI-Retail Direct Scheme was launched by the Prime Minister on November 12, 2021.


Under the scheme, individual investors are permitted to open a Retail Direct Gilt account with the RBI, using an online portal, through which investments in government Securities can be made in primary and secondary markets.


The scheme has brought government securities within easy reach of retail investors by simplifying the process of investment. "In its endeavour to expand the basket of products offered through the Retail Direct Portal, Reserve Bank of India, in consultation with the Government of India, has enabled subscription to Floating Rate Savings Bonds, 2020 (Taxable) – FRSB 2020 (T)," the central bank said in a statement.