Winning Bizness Sports Desk

Mumbai. RBI has adopted a strict stance with regards to the unwanted dominance of one or two big commercial banks in the system. RBI Governor Shaktikanta Das has said that it has been seen that only one or two members have more influence in the board of directors of big banks, which is not the right anyway and therefore this needs to be checked immediately. Addressing directors of urban co-operative banks (UCBs) at a meeting organized by the RBI, Das said the discussion on the board should be free, fair and democratic. One or two members of the board, the chairman or vice-chairman, should not have excessive influence or dominance. We have seen this in big commercial banks also. Wherever we saw this, we told them that this is not the right way.

All directors should be given a chance

Das also said that all directors should be given a chance to speak and any particular director should not have the final say on any matter. In fact, such problems were seen in the promoter-led Yes Bank in the Indian banking system. Later, under the leadership of SBI, many banks together came out of the problems. Yes Bank co-founder and CEO Rana Kapoor was arrested in connection with irregularities in the bank.

Director need expertise in banking

Das said that those who are selected for the post of director in UCBs need expertise in various aspects of banking, such as risk management, information technology etc. The managing director should have the freedom to act as he feels is right. It is also important for the directors to clarify their doubts. The Director goes through the previously prepared agenda notes and also asks relevant questions.