April 21, 2022<\/p>\n\n\n\n
The Chairman \/ Managing Director \/ Chief Executive Officer
All Primary (Urban) Co-operative Banks<\/p>\n\n\n\n
Madam\/Dear Sir,<\/p>\n\n\n\n
It has been observed during the course of supervisory reviews that some of the Urban Co-operative Banks (UCBs) have adopted the practice of creating honorary designations (remunerated or otherwise)\/conferring titles at Board level, such as Chairman Emeritus, Group Chairman, etc., which are not recognised in applicable statutes or regulations.<\/p>\n\n\n\n
While such positions\/titles may be indicative of certain privileges\/rights for the incumbent to access all board materials and participate in board\/committee meetings, enforcing liability or obligations on such person may be difficult. Such positions may be seen as creating conflicts of interest as well as creation of a parallel or shadow authority impeding effective and independent functioning of the legally constituted board in the best interest of all its stakeholders.<\/p>\n\n\n\n
3. As such, UCBs are directed not to create any honorary positions\/titles at Board level or confer such titles that are non-statutory in nature and to eliminate any such existing position\/titles within one year from date of this circular.<\/p>\n\n\n\n
4. These directions are issued under Section 35A and Section 36(1)(d) of the Banking Regulation Act, 1949 (AACS).<\/p>\n\n\n\n
Yours faithfully,<\/p>\n\n\n\n
(Shrimohan Yadav)
Chief General Manager<\/p>\n\n\n\n