Audit Committee of the Board of Directors – Nomination of Non-Executive Chairman

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RBI has issued notification dated July 13, 2017 to the Chief Executives of All Indian Commercial Banks regarding Audit Committee of the Board of Directors – Nomination of Non-Executive Chairman.

Please refer to Para 3 (ii) of the circular dated September 26, 1995 on “Audit Committee of the Board of Directors – Reconstitution” and Para (ii) of our circular DOS.No.BC.3/08.91.020/96 dated January 20, 1997 on “Public Sector Banks – Audit Committee of the Board of Directors”, wherein it has been advised that Audit Committee of the Board of Directors (ACB) should be chaired by any one of the non-executive/ non-official directors.

2. In view of the bifurcation of the post of Chairman and Managing Director of Public Sector Banks (PSBs) by Government of India into a non-executive Chairman to give an overall policy direction to the bank and a full time executive Managing Director and Chief Executive Officer (MD&CEO) to oversee the day to day functioning of the bank (GOI notification dated April 24, 2015), it is clarified that in banks where the Board of Directors is chaired by a non-executive Chairman, there will not be any restriction if he/she is also nominated to the Audit Committee of the Board of Directors.

3. The other instructions, as amended from time to time, shall remain unchanged.