May 31 2020
RBI mulls cooling-off period for its retired top officials
24 December 2018

‘Those aspiring for posts of CEO, chairman of firms may have to wait for 3 years’

The Reserve Bank of India (RBI) has come up with a new norm for its top officials who want to take up the job of a chairman or chief executive of any other entity, post retirement.

According to central banking sources, the RBI has mandated a three-year cooling-off period for retired officials before they can take over as chairman or chief executive of any other entity. While making this new rule, global best practices have been cited, sources said.

However, to join as a director of any company’s board, the one-year cooling period mandate continues. RBI had been liberal in waiving off the one-year cooling period in the past, they said.

There have been several instances of top RBI officials like Deputy Governor and Executive Directors taking up the position of chairman of other entities.

G. Padmanabhan, who retired as RBI’s Executive Director May 31, 2015 joined as the non-executive chairman of Bank of India on August 14, 2015. The appointment was made by the government. Shyamala Gopinath, who retired from the RBI as Deputy Governor in June 2011, became the non-executive chairman of HDFC Bank in January 2015.

In June, Bandhan Bank’s board cleared the appointment of former RBI Deputy Governor H.R. Khan as its non-executive chairman. Mr. Khan had retired as Deputy Governor in July 2016. RBI has not approved Bandhan Bank’s application following which the lender withdrew the application.



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