As per RBI Guidelines, Clean Records of Company or its manager or directors is primary requirement. for such Section VIII are as follows:
‘Fit and proper’ criteria for directors of FFMC
(a) The Boards of FFMCs should undertake a process of due diligence to determine the suitability of the person for appointment / continuing to hold appointment as a director on the Board, based upon qualification, expertise, track record, integrity and other ‘fit and proper’ criteria. For assessing integrity and suitability, factors like criminal record, if any, financial position, civil action initiated to pursue personal debts, refusal of admission to or expulsion from professional bodies, sanctions imposed by regulators or similar bodies, previous questionable business practices, etc. should be considered. The Board of Directors should assess ‘fit and proper’ status by calling for information by way of self-declaration, verification reports from market, etc. FFMCs should obtain necessary information and declaration from the proposed / existing directors for the purpose as given in the Master direction on Reporting.
(b) The process of due diligence should be undertaken by the FFMCs at the time of appointment / renewal of appointment.
(c) The Boards of the FFMCs should constitute Nomination Committees to scrutinise the declarations.
(d) Based on the information provided in the signed declaration, Nomination Committees should decide on the acceptance or otherwise and may make references, where considered necessary to the appropriate authority / persons, to ensure their compliance with the requirements indicated.
(e) FFMCs should obtain annually as on 31st March a simple declaration that the information already provided has not undergone change and where there is any change, requisite details are furnished by the directors forthwith.
(f) The provisions of Companies Act 2013 shall apply with regard to the age of the candidate. Further, the candidate should not be a Member of Parliament / Member of Legislative Assembly / Member of Legislative Council.
(g) Any change of directors during the year should be reported to the Regional Office concerned of the Foreign Exchange Department, Reserve Bank of India as given in the Master direction on Reporting.
(h) Comments of respective Departments of the Reserve Bank will be obtained on the operations of an applicant who / whose parent organisation is already licenced / authorised by the Reserve Bank.