RBI nominee on PSB boards may be withdrawn after banks are strengthened

Urjit Patel had on Tuesday told the Parliamentary Standing Committee on Finance that no central bank nominee should be on the boards of public sector banks

Reserve Bank of India Governor Urjit Patel’s plea to withdraw its nominees on the board of banks was also advocated by his predecessor Raghuram Rajan.

However, a committee under veteran banker P J Nayak, which had submitted a report in 2014 to review the governance of banks, was not in favour of the move, unless the boards were empowered.

Patel had on Tuesday told the Parliamentary Standing Committee on Finance that no central bank nominee should be on the boards of public sector banks (PSBs) to avoid "any conflict of interest" and the regulator is in discussions with the government.

The RBI nominates a