The government has the right to terminate the term of office of a whole-time director, including the managing director, any time before the expiry of the term specified.
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The government has increased the maximum tenure of MD and CEO of public sector banks (PSBs) to 10 years, from 5 years earlier, subject to a superannuation age of 60 years, according to an official notification. This is also applicable to whole-time directors of all PSBs. The move is expected to help the government retain the best talent in the banking sector.
Earlier, the MD or executive director of a public sector undertaking (PSU) bank was eligible for a maximum tenure of 5 years or 60 years whichever was earlier. This is also applicable for whole-time directors of all central public sector enterprises (CPSEs).
According to the notification dated November 17, the term for the appointment has been extended to 10 years, from the earlier 5 years, subject to superannuation age of 60 years.
“A whole-time director, including the managing director, shall devote his whole time to the affairs of the nationalised bank and shall hold office for such initial term not exceeding five years and extendable up to a total period, including the initial term, not exceeding 10 years, as the central government may, after consultation with the Reserve Bank, specify and shall be eligible for re-appointment,” it said.
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The government has the right to terminate the term of office of a whole-time director, including the managing director, any time before the expiry of the term specified, by giving him a notice of not less than three months, in writing or three months’ salary and allowances in lieu of notice.
