Non-executive chairman can be part of bank's audit committee: RBI

Mumbai: Reserve Bank on Thursday said the non- executive chairman of a bank can also be nominated to the audit committee of board of directors.

Earlier, any one of the non-executive/non-official directors was supposed to chair the audit committee of the board of the directors of a public sector bank.

In 2015, the government had bifurcated the posts of chairman and managing directors in Public Sector Banks (PSBs). While the chairman became responsible for overall policy directions, managing director and chief executive officer (MD&CEO) became the executive head, accountable for day-to-day functioning of bank.

"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," RBI said in a notification.