The Chief Executives,
All Banks/DFIs

Dear Sirs/Madam,

Payment of Remuneration to the Board of Directors

Please refer to the Prudential Regulations issued vide BPD Circular No.35 dated 28th October, 2003.

2. It has been decided to replace Para C.2 in regulation G-1 of the Prudential Regulations for Corporate/ Commercial Banking as under:

"The banks/DFIs during a calendar year may pay a reasonable and appropriate remuneration to their non-executive directors and chairman for performance of their functions and duties. However, the total amount of remuneration to be paid to the non-executive directors and chairman during a calendar year should be approved on a pre or post facto basis in the annual general meeting. It may please be ensured that except as mentioned above, no additional payment or perquisites will be paid to the non-executive directors and chairman. Furthermore, no consultancy or allied work will be awarded to the non-executive directors or to the firms/ institutions/ companies etc. in which they hold substantial interest."