The Section 10A of Banking Regulation Act, 1949 defines the rules and regulations related to Board of Directors of banking company.
Board of Directors
- The total number of members of the Board of Directors of a banking company should consists of at least fifty-one per cent of persons with special knowledge or practical experience in field of accountancy, agriculture and rural economy, banking, co-operation, economics, finance, law, small-scale industry or any other special knowledge which could be useful to the banking company in opinion of RBI. However, at least two persons should have special knowledge or practical experience in respect of agriculture and rural economy, co-operation or small- scale industry.
- The member of Board of Directors should not have substantial interest in company or firm which carries on any trade, commerce or industry. However company registered under section 25 of the Companies Act, 1956 and small-scale industrial concern are not included in it.
- The Director of a banking company, other than Chairman or whole-time Director can hold office continuously for a more than eight years
- The Chairman or other whole-time Director who has been removed from office not be eligible to be appointed as a Director of such banking company for a period of four years from the date of his cessation.
- If requirement laid down in Section 10A of Banking Regulation Act is not fulfilled, the Board of Directors of such banking company shall re-constitute so as to ensure that the said requirements are fulfilled
- If, for the purpose of re-constituting the Board as per provisions of Section 10A of Banking Regulation Act, it is necessary to retire any Director or Directors, the Board may, by lots drawn in such manner as may be prescribed, decide which Director or Directors shall cease to hold office and such decision shall be binding on every Director of the Board
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