Please refer to Para 2 of Regulation G-1 (C) of Prudential Regulations for Corporate and Commercial Banking, which relates to payment of remuneration and TA/DA to the directors for performing their duties & attending board meetings.

2. It may be noted that the above Para clearly stipulates that banks/ DFIs during a calendar year may pay a reasonable and appropriate remuneration to their non-executive directors and chairman only, for performance of their functions and duties.

3. However, it has been observed by the State Bank that some banks/DFIs are also paying remuneration/fee to their executive directors as well, in violation of the above instructions.

4. The banks/DFIs are therefore advised that fee/remuneration may be paid to the non-executive directors only, as compensation of their time and services in terms of overseeing affairs of the bank. Thus, no such remuneration shall be paid to the executive directors, keeping in view the fact that they are full time employees of the bank, and as such, are already paid for their services. However, the Executive Directors can be paid usual TA/DA, as per banks/DFIs standard rules and regulations, for attending the board meetings.