In a crackdown on political interference, the Reserve Bank of India has barred MPs, MLAs and members of municipal corporations or other local bodies from holding the office of managing director (MD) or whole-time director (WTD) in urban cooperative banks.
These directions are applicable to all Primary (Urban) Co-operative Banks (UCBs). The RBI had exempted UCBs with a deposit size of less than Rs 100 crore from the requirement of seeking prior approval of the Reserve Bank for appointment / re-appointment / termination of appointment of MDs or WTDs.
Under the propriety criteria, the person to be nominated as MD or WTD shall not be engaged in any other business or vocation; shall not hold the position of a Member of Parliament or state legislature or municipal corporation or municipality or other local bodies; and shall not be a director of any company other than a company registered under Section 8 of the Companies Act, 2013.
In addition, he shall not be a partner of any firm which carries on any trade, business or industry; should not have substantial interest in any company or firm as defined in Section 5 (ne) read with Section 56 of the Banking Regulations Act, 1949; and shall not be a director, manager, managing agent, partner or proprietor of any trading, commercial or industrial concern.
In addition, the person should not be of unsound mind and stands so declared by a competent court; should not be an undischarged insolvent; should not be convicted by a criminal court of an offence involving moral turpitude; and should not be a director of any other co-operative bank or a co-operative credit society.
The person shall submit a self-declaration form on personal integrity. ( IANS )