RBI New Rules: RBI keeps issuing new rules from time to time regarding better functioning of banks. Now RBI has issued new rules related to MDs and CEOs of banks. Let’s know about it …
In the new circular of RBI i.e. Reserve Bank of India, it has been said that if there is a big shareholder or promoters in the bank. So he cannot remain in the post of MD-CEO for more than 12 years. At the same time, if a professional CEO is appointed, then his tenure cannot be more than 15 years. Also, the age for this has been fixed at 70 years in private bank. If put in easy words, a person above the age of 70 years cannot become a CEO nor can he be appointed on it. On this, experts say that this will not have a significant impact on the customers of banks. Because it is a matter of management. However, at present, its impact can be seen on the shares of Kotak Mahindra Bank and Bandhan Bank.
New RBI rules
RBI has issued a new circular regarding the tenure of the CEO, MD of banks. No person can be appointed to these posts for more than 15 years.
The promoter or major shareholder of the bank cannot hold this position for more than 12 years. Maximum age should be 70 years.
Appointment of CEO and MD may be contrary to these rules if required. But RBI will provide complete information for this soon. After this, no post of bank will be appointed for 3 years.
From 1 October 2021, these new rules will be applicable to all banks.
What will happen with this
World-renowned brokerage house CLSA says that the decision will have an impact on Kotak Mahindra Bank and Bandhan Bank. Because at present, the promoters of both are appointed to the top post of banks. The tenure of both Uday Kotak and Deepak Gupta will expire in December 2023.
US brokerage house JP Morgan has told in its report that the new rules of RBI will affect the sentiment of Kotak Bank. This can lead to selling in the bank.
However, Uday Kotak still has a 3-year term left. However, this will not have any effect on the earnings of Kotak Bank. At the same time, according to the track record of Kotak, the sentiment will be negative. At the same time, Ghosh of Bandhan Bank has a big time of 9 years.
In 2003, RBI gave the bank license to Uday Kotak. Kotak Mahindra Bank started after this. Kotak Mahindra Bank today ranks among the top companies or banks in the country in terms of market cap. The market cap of the bank is more than Rs 3.45 lakh crore.
In 2009, Chandrashekhar Ghosh got Bandhan registered by the Reserve Bank as NBFC i.e. Non-Banking Finance Company. He changed the lives of about 8 million women.
In the year 2013, the RBI invited applications to set up a bank by the private sector. Ghosh also applied for a banking license.
When the RBI announced the license, everyone was surprised. Because one of these licenses was found to be bonded. It was a surprise to get a license to open a bank to a Kolkata-based microfinance company. Bandhan Bank started functioning fully from 2015.
Stock condition
After this news, the stock of Kotak Mahindra Bank has come down. The stock has fallen by 1.20 per cent to Rs 1739. However, Bandhan Bank’s stock started with a decline. But now he has finished all the decline. The stock is up 2 percent.
What will be the impact on customers?
Experts say that the RBI rules will not affect the customers. They will continue to receive service as before.
