RBI asks Federal Bank to submit fresh names for CEO

The Reserve Bank of India (RBI) has asked the Federal Bank, a private sector lender, to submit a fresh proposal including at least two fresh names for the position of Managing Director and Chief Executive Officer (MD and CEO).

Having written to the RBI on October 6, 2023, requesting a one-year extension for Shyam Srinivasan as MD and CEO, as his current three-year term concludes on September 22, 2024, the bank faced a twist on January 4. RBI responded, instructing the bank to submit a fresh proposal featuring the names of at least two new candidates for the CEO role.

During its meeting on January 5, the bank’s Board of Directors acknowledged the RBI’s letter and declared its intention to proceed accordingly.

Shyam Srinivasan assumed the role of Managing Director and CEO of Federal Bank on September 23, 2010, marking a decade in the position through various reappointments.

In June 2020, an RBI discussion paper on ‘governance in commercial banks in India’ recommended limiting the tenure of bank promoters as CEOs and whole-time Directors to 10 years for those from the promoter group and 15 years for those from the non-promoter group. Following this proposal, Srinivasan is eligible to continue as CEO until 2025. The RBI also suggested capping the upper age limit for bank CEOs and WTDs at 70 years.