The Section 10 of Banking Regulation Act, 1949 states that there are some restrictions of employment of managing agent by banking company.
Restrictions on Employment
- The banking company shall not be managed by any Managing agent
- The banking company shall not employ or continue the employment of any person who:
- has been adjudicated insolvent
- has suspended payment or has compounded with his creditors
- has been convicted by a criminal court of an offence involving moral turpitude
- The banking company shall not employ any person whose remuneration or part of whose remuneration takes the form of commission or of a share in the profits of the company
- The banking company shall not employ any person whose remuneration is excessive in the opinion of the Reserve Bank. While forming its opinion about remuneration, the RBI should consider the financial condition and history of the banking company, its size and area of operation, its resources, the volume of its business, and the trend of its earning capacity. The number of its branches, qualifications, age and experience of the person. The remuneration paid to other persons employed by the banking company or to any person occupying a similar position in any other banking company similarly situated
- The banking company shall not be managed by Director of any other company who is not subsidiary of banking company or a company registered under section 25 of the Companies Act, 1956. The prohibition shall not apply to any such Director for a temporary period not exceeding three months or such further period not exceeding nine months as the Reserve Bank may allow.
- The banking company shall not be managed by person who is engaged in any other business or vocation.
- The banking company shall not be managed by a person managing the company who term of office exceeding five years at any one time. However term of office of any such person may be renewed or extended by further periods not exceeding five years.
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