The Reserve Bank has ended the suspense on the age
limit for private sector bank chief executives, bringing relief for investors
in HDFC BankBSE -0.96 % and IndusInd Bank, who might have been worried about
the fate of their rock star chiefs who have delivered enormous returns in the
past few years. Full-time directors of private banks can now continue up to the
age of 70, in line with the latest Companies Act.
The bank boards will, however, retain the right to
set a lower retirement age for officials, said RBI on Tuesday. One consequence
of RBI's clarification might be that second-rung leaders in some of these banks
could begin to look for greener pastures as their leadership opportunities will
diminish, with many current CEOs likely to continue at least for another five
years.
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