The Reserve Bank of India will not be giving in to the banks’ demand to increase the retirement age of private sector bank chiefs and RBI’s Governor Shaktikanta Das explained it with an analogy from cricket.“You must retire when people ask ‘why’ and not ‘why not’,” Das said, quoting former Indian cricketer Sunil Gavaskar. “I’m a fan of cricket.”Speaking at an event by Mint, Das was asked why there was no age limit for one to be prime minister but a private bank head needed to retire at 70.Das also reinforced the need for banks to focus on their operational efficiency, saying slow growth of credit is the biggest challenge being faced by banks now. Banks are not only facing stiff competition from fintech companies, but also from large technology companies (Big Tech) which are entering financial services industry in a big way. “Banks would have to strive hard to stay relevant,” he said.While bankers had been indicating that the central bank was reviewing the retirement age, a few months ago RBI conveyed its decision to the two banks where the incumbents were nearing the retirement age, with many expecting a fresh extension.Heads of two private lenders, Aditya Puri of HDFC Bank and Romesh Sobti of IndusInd Bank, are set to retire this year due to the RBI’s norms that mandate them to step down at the age of 70. Some bankers have wanted the age limit to be raised to 75 years to bring RBI rules on par with the new Companies Act, but the RBI hasn’t relented.RBI has already conveyed this to boards of banks that decide on a CEO. Sobti is set to retire in March. It was earlier speculated that the IndusInd board would seek an extension for Sobti, but in October the bank said a candidate had been finalised to take over. HDFC board reshuffled the role of its top management personnel last August in what is speculated as a step in preparing the lender for life after the retirement of founder chief executive Aditya Puri in October this year.
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