Section 14: Formation of Board of Directors

1) A bank or financial institution shall have a Board of Directors comprising at least five Directors and not exceeding seven Directors.

2) Subject to this Act and the Articles of Association, the General Meeting of the bank or financial institution shall appoint Directors.

Provided that,-

(a) Until the First Annual General Meeting of the bank or financial institution is held, promoters shall appoint the Directors.

(b) In case the position of any Director falls vacant before the holding of the Annual General Meeting, the Board of Directors may appoint a Director until the next General Meeting is held.

(c) In case any corporate body has subscribed shares, it may appoint a Director to the proportion of the number of shares it has subscribed, and while nominating in such a manner, the same person shall not be nominated to more than one bank or financial institution.

(d) Notwithstanding anything contained in Part (c), there shall be no obstruction to appoint a person who is a Director in any bank or financial institution as Director of an Infrastructure Development
Bank.

3) The Board of Directors shall appoint at least one Professional Director from among the persons possessing qualifications and experience pursuant to Section 17, and information thereof shall be furnished to the First General Meeting to be held after such appointment.

Provided that the promoter, Director or shareholder possessing more than 0.1 percent share of the bank and financial institution and his/her member of family shall not be allowed to become a Professional Director.

4) Notwithstanding anything contained in sub-sections (1) and (3), no more than one member of a family may become the Director of any bank or financial institution at the same time.

5) A Director chosen by the Directors from among themselves by majority decision shall be the Chairperson of the Board of Directors.

6) The company, corporate body, foreign bank or financial institution which has subscribed shares of a bank or financial institution may, while appointing a director to proportionate to the shares as it has subscribed, appoint an Alternate Director to work in the absence of the Director.