The 'Fit and Proper' criteria for nomination of directors applies only to private sector banks. Do you agree with the statement ? Describe the phrase 'Fit and Proper'.

No, I do not agree with the statement that the 'Fit and Proper' criteria for nomination of directors applies only to private sector banks. While some recommendations made by the Ganguly Committee are specifically applicable to private sector banks, the concept of 'Fit and Proper' criteria for directors is a broader principle of good corporate governance and is applied by various regulators to different types of entities, including public sector banks and other regulated entities. The recommendations in this regard are as under: The Board of Directors of the banks while nominating/co-opting directors should be guided by certain broad 'fit and proper' norms for directors, viz. formal qualification, experience, track record, integrity etc. For assessing integrity and suitability features like criminal records, financial position, civil actions initiated to pursue personal debts, refusal of admission to or expulsion from professional bodies, sanctions applied by regulators or similar bodies, previous questionable business practices etc. should be considered. The Board of Directors may, therefore, evolve appropriate systems for ensuring 'fit and proper' norms for directors, which may include calling for information by way of self-declaration, verification reports from market, etc. The following criteria, which is in vogue in respect of nomination to the boards of public sector banks, may also be followed for nominating independent/ non-executive directors on private sector banks: The candidate should normally be a graduate (which can be relaxed while selecting directors for the categories of farmers, depositors, artisans, etc.) He/she should be between 35 and 65 years of age. He/she should not be a Member of Parliament/ Member of Legislative Assembly/Member of Legislative Council.