The Companies Act, 2013 and Rules thereunder have enhanced the roles and responsibilities of Non-official Independent Directors. Rule 5 of The Companies (Appointment and Qualification of Directors) Rules, 2014 related to qualifications of independent directors provide that an independent director shall posses appropriate skills, experience and knowledge in one or more field or finance, law, management, sales, marketing, administration research, corporate governance, technical operations or other disciplines related to company’s operations.

The Government has amended the procedure of appointment of NoDs in PSB, Insurance Companies and Financial Institutions. Following is the press release in this regard.

PRESS INFORMATION BUREAU
GOVERNMENT OF INDIA
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GOVERNMENT AMENDS PROCEDURE FOR APPOINTMENT OF NON OFFICIAL DIRECTORS (NODS) ON THE BOARDS OF PUBLIC SECTOR BANKS, INSURANCE COMPANIES AND FINANCIAL INSTITUTIONS TO PROFESSIONALISE THE BOARDS

New Delhi, April 1, 2015
Chaitra 11, 1937

The Government of India has amended the procedure for appointment of Non Official Directors (NoDs) on the Boards of Public Sector Banks (PSBs), Insurance Companies and Financial Institutions with a view to professionalise the Boards of these banks and further provide required skill sets to improve the quality of deliberations on the Boards of these banks leading to efficient management of these banks and further leading to better profitability ratios.

Salient features of the revamped procedure for appointment of NoDs are as follows:-

-        A designated Web Portal ( https://financialservices.gov.in/nod) has been created where interested persons can apply online with all the relevant details. The person will have access to status of his application.

-        There would be one High Level Search Committee which will go through the available applications and would recommend names to the Government for approval.

-        The applicant should have at least a graduation degree, should be less than 67 years of age and have 20 years of work experience, in following categories:

o   Persons of eminence with special academic training or practical experience in the fields of agriculture, rural economy, banking, cooperation, economics, business management, human resources, finance, corporate law, Risk Management, Industry and IT will ordinarily be considered.

o   Retired Senior Government Officials, Academicians, Directors of premier Management, Banking Institutes, professors with 20 years experience would be considered. Chartered Accountants with 20 years experience would also be considered.

o   NoDs could be appointed for maximum six years or two terms.

 

NOD Criteria/Guidelines laid down by the Government Click Here >>