Shares of Federal Bank jumped as much as 6.1 percent on Monday to its day's high of Rs 90.90 on the BSE after the Reserve Bank of India (RBI) approved the re-appointment of Shyam Srinivasan as managing director and chief executive officer of the bank.
"We wish to inform you that the approval from Reserve Bank of India has been received on July 09, 2021, for the re-appointment of Mr Shyam Srinivasan as the MD & CEO of the Bank for three years with effect from September 23, 2021, till September 22, 2024," the bank said in a regulatory filing. Srinivasan took charge as MD and CEO of the bank on September 23, 2010.
Except for Federal Bank, the central bank has not given a full extension to the terms of management officials as sought by the boards of other banks.
For instance, DCB Bank sought a three-year extension for their current MD & CEO Murali, but his term was extended only by a year. RBL Bank had also sought three years’ extension for V Ahuja as MD & CEO of the bank, however, his term was also extended by only a year.
According to RBI’s guidelines for private banks, after the completion of their term, MDs and CEOs or whole-time directors will be eligible for re-appointment in the same bank after a minimum gap of three years. During the cooling-off period, the person should not be associated with the bank or its group entities in any capacity, either directly or indirectly.