The firm that promotes the bank should be wholly owned by the promoter group and 50% of the directors of the NOFHC should be independent directors

The Reserve Bank of India is unlikely to allow the promoters of private banks to become CEOs when it allows new banks to come up.

The Central bank is keen that the promoter doesn’t become the chief executive in order to avoid conflict of interests and other vested interests. “The RBI made the mistake of allowing some private banks to come up with the promoters becoming CEOs as well.

It should not happen again,” said a senior official of the RBI.

The promoters and CEOs of two private banks — Kotak Mahindra and Yes Bank — which came up in 2004 are the same. Global Trust Bank, whose CEO and promoter was Ramesh Gelli, went down in a scam and was later merged with Oriental Bank of Commerce. (PTI)