Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ACCOUNTING STANDARDS :: TAX RATES - GOODS TAXABLE @ 4% :: VAT Audit :: TDS :: VAT RATES :: list of goods taxed at 4% :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARD :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: articles on VAT and GST in India :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: form 3cd :: due date for vat payment :: cpt
 
 
« Latest Circulars »
 Sovereign Gold Bond Scheme 2016 -17 - Series IV - Issue Price
 Master Direction – Money Transfer Service Scheme (MTSS)
 Payment Systems - Next Orbit (Shri R. Gandhi, Deputy Governor - February 20, 2017 - at the launch of Bharat QR Code at Hotel Trident, Mumbai)
 Financing MSMEs: Banks & FinTechs – Competition, Collaboration or Competitive Collaboration? (Shri S. S. Mundra, Deputy Governor – February 20, 2017 – at the NAMCABS Seminar organized by College of Agricultural Banking in Mumbai)
 Issuance of Rupee denominated bonds overseas – Multilateral and Regional Financial Institutions as Investors
 RBI-Formation of twenty one new districts in the State of Telangana - Assignment of Lead Bank Responsibility
 RBI imposes penalty on Janata Urban Co-operative Bank Ltd., Wai, District Satara
 Monitoring of Foreign Investment under PIS in Indian Companies- Incorporation in Ban List–M/s HDFC Bank Ltd.
 Reserve Bank of India seeks Comments on Draft Circular on Rationalisation of Merchant Discount Rate (MDR) for Debit Card Transactions
 Forward Rate Agreement (FRA) and Interest Rate Swap (IRS) - Withdrawal of Fortnightly return
 RBI-Foreign Investments in India

RBI-Guidelines on Compensation of Non-executive Directors of Private Sector Banks
June, 02nd 2015

RBI/2014-15/617
DBR.No.BC.97/29.67.001/2014-15

June 1, 2015

The Managing Director and CEO
All Private Sector Banks

Dear Sir/Madam,

Guidelines on Compensation of Non-executive Directors of
Private Sector Banks

The need to bring in professionalism to the boards of banks cannot be overemphasized. In order to enable banks to attract and retain professional directors, it is essential that such directors are appropriately compensated. At present, banks in private sector pay only sitting fees to non-executive directors, and no other remuneration is paid to them. The Part-time Chairman however, is being paid a fixed remuneration with the approval of RBI.

2. In this background, an announcement was made in the First Bi-monthly Monetary Policy statement 2015-16 to issue guidelines to private sector banks on remuneration for the non-executive directors (other than Part-time Chairman) that will reflect market realities and will be within the parameters specified in the Banking Regulation Act, 1949 and the Companies Act, 2013.

3.Accordingly, Reserve Bank has finalized the guidelines on compensation for non-executive Directors, which are contained in the Annex for implementation by private sector banks.

4. As hitherto, private sector banks would be required to obtain regulatory approval regarding remuneration to Part-time non-executive Chairman in terms of Section 10B(1A)(i) and 35B of the Banking Regulation Act, 1949.

Yours faithfully,

(Sudha Damodar)
Chief General Manager

Encl: As above


Annex

Guidelines on Compensation of Non-executive Directors (Except Part-time
Chairman) of Private Sector Banks

1. Compensation Policy

1.1 The Board of Directors, in consultation with its Remuneration Committee, should formulate and adopt a comprehensive compensation policy for the non-executive Directors (other than the part-time non-executive Chairman). While formulating the policy, the Board shall ensure compliance with the provisions of the Companies Act, 2013.

1.2 The Board may, at its discretion, provide for in the policy, payment of compensation in the form of profit related commission to the non-executive directors (other than the Part-time Chairman), subject to the bank making profits. Such compensation, however, shall not exceed Rs.1 million per annum for each director.

2. Sitting fees and reimbursement of expenses

2.1 In addition to the directors’ compensation mentioned in para 1.2 above, the bank may pay sitting fees to the non-executive directors and reimburse their expenses for participation in the Board and other meetings, subject to compliance with the provisions of the Companies Act, 2013.

3. Regulatory Approval / Supervisory Oversight

As hitherto, banks in private sector would be required to obtain prior approval of RBI for granting remuneration to the part-time non-executive Chairman under Section 10B(1A)(i) and 35B of the Banking Regulation Act, 1949. The compensation policies of banks would be subject to supervisory oversight including review under the Supervisory Review and Evaluation Process (SREP) under Pillar 2 of Basel II framework. Deficiencies would have the effect of increasing the risk profile of banks with attendant consequences, including a requirement of additional capital if the deficiencies are very significant.

4. Disclosure

Banks are required to make disclosure on remuneration paid to the directors on an annual basis at the minimum, in their Annual Financial Statements.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - About Us

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions