In February, the Reserve Bank of India (RBI) announced that it had revised the annual compensation ceiling limit for non-executive directors of banks to Rs 30 lakh.
Additionally, the RBI stated that the bank’s Board may decide to set a lower sum within the annual cap of Rs 30 lakh based on the bank’s size, the NED’s experience, and other pertinent considerations.
The previous cap was set at Rs 20 lakh annually.
According to the RBI, private sector banks would have to get regulatory approval before paying a part-time chairman.
Banks must disclose in their Annual Financial Statements the minimum amount of compensation paid to the directors each year.
All Private Sector Banks, including Payment Banks (PBs) and Small Finance Banks (SFBs), as well as the fully owned subsidiaries of Foreign Banks, would be covered by the guidelines. According to RBI, the directives will take effect right away.
