A panel set up by the Reserve Bank of India has proposed that the Government and the RBI should consider laying a road map for prescribing certain specific qualification or certification while considering appointment of directors on the board of commercial banks.
It also proposed that a Banking Aptitude Test as national, online test can be conducted for entry-level recruitment in banks.
The panel said some form of training intervention and a new forum could be considered for members on the boards of banks. “These training inputs could be administered by various organisations including RBI, the banks concerned themselves, specialised training on areas like treasury management, foreign exchange etc by such institutions as NIBM, IIBF, CAFRAL etc. Banks could also consider deputing them to institutions in India and abroad for embellishing their banking skills,” the ‘Committee on Capacity Building in Banks and Non-banks’, headed by G Gopalakrishna, former executive director, Reserve Bank of India.
The panel’s proposals come against the backdrop of allegations that the directors appointed by the government on banks are from political or cultural background without any banking experience.
“To provide a forum for further exchange of information and best practices among the Board member fraternity, a formal Forum for Board Members could be instituted under the aegis of CAFRAL which could meet periodically to discuss matters of contemporary relevance,” it said.
The committee also said that a good induction process will go a long way in welcoming a newly appointed director and impressing upon him or her expectations of the bank as also the regulator. It also recommended a formal and systematic induction process and the details of specific areas in which the new inductees to the board can be sensitised.
On the Banking Aptitude Test, it said the BAT score can be designed to provide an insight into the candidate’s aptitude for banking.