In view of the development,referred to above,RBI will be ill-advised to give in and withdraw its nominees on the board of public sector banks. Needless to add that RBI nominees will have to go by RBI guidelines and ensure compliance by banks, regardless what the government nominees may say. Ultimately decisions have to be taken by the Board by majority and it is expected that in such a scenario other independent directors would assert and go by what is good for the health of the bank and not for the ego satisfaction either of the government or RBI. RBI nominees on the board of commercial banks have an onerous task and they have to do a lot of homework, study the agenda to make their contribution effective. Top management of banks find lot of comfort with the presence of RBI nominee on their board and most of them in the past had advocated for their continuation when RBI planned their withdrawal. Apart from the banks which get benefited by the advice/experience of RBI nominees, the directorship also affords an excellent opportunity to RBI Officers for their all-round development in making them true banking professional. Therefore, RBI need not get unduly disturbed by this act of the MOF, and continue to pursue its policies through their nominees on the board of commercial banks including public sector banks.
M.L.Mahajan
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