Dr. Ganguly Committee recommended some Corporate Governance norms which are applicable only to private sector bank. What were these recommendations ?

The RBI vide its circular dated 20th June 2002, circulated to all scheduled commercial banks, a Report of the Consultative Group of Directors of Banks/Financial Institutions (Dr. Ganguly Group) - Implementation of recommendations. The RBI through this circular urged the banks that these recommendations be adopted and implemented by banks. Dr. Ganguly Committee's recommendations on corporate governance applicable only to private sector bank are as under: (I) Eligibility criteria and 'fit and proper' norms for nomination of directors: 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. The following criteria, which are considered for 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. (II) Commonality of directors of banks and non-banking finance companies (NBFC): In case, a director on the board of an NBFC is to be considered for appointment as director on the board of the bank, the following conditions must be followed: He/she is not the owner of the NBFC, [i.e., share holdings (single or jointly with relatives, associates, etc.) should not exceed 50%]. He/she is not related to the promoter of the NBFC. He/she is not a full-time employee in the NBFC. The concerned NBFC is not a borrower of the bank. (III) Composition of the Board: The composition of the Board should be commensurate with the business needs of the banks and should be blend of professionals having skills such as, marketing, technology and systems, risk management, strategic planning, treasury operations, credit recovery etc.