The Reserve Bank of India today set up an eight-member panel to review functioning of board of banks and examine ‘fit and proper’ criteria for directors, including their tenure.

The committee, to be headed by former Axis Bank chairman P.J. Nayak, will analyse representation on bank boards to see whether the boards have appropriate mix of capabilities and necessary independence to govern the institution.

It will also investigate possible conflicts of interest in board representation, including among owner representatives and regulators.

“In this regard to also assess and review the ‘fit and proper’ criteria for all categories of directors of banks, including tenor of directorship,” the RBI said in a statement.

According to the terms of reference, the committee will review the regulatory compliance requirements of bank boards and also judge what can be rationalised and where requirements need to be enhanced.

The panel, which is expected to submit its report within three months from the date of its first meeting, will also examine the working of bank boards, including whether adequate time is devoted to issues of strategy, growth, governance and risk management.

It will also review central bank regulatory guidelines on bank ownership, ownership concentration and representation in the board, it said.

The panel is set to examine board compensation guidelines, and any other issue relevant to the functioning of bank boards and the governance they exercise.

Other members of the panel are S. Raman, wholetime member, Sebi, Shubhalakshmi Panse, Chairperson, Allahabad Bank, Pratip Kar, former executive director, Sebi, Joydeep Sengupta, director, McKinsey & Company, Harsh Vardhan, Partner, Bain & Company, Somasekhar Sundaresan, partner, J. Sagar Associates, and K. Subramanian, assistant professor, Indian School of Business. (PTI/The Hindu)