Co-operative Banks Act, 2007 (Act No. 40 of 2007)Chapter II : Registration, Constitution, Functions, Management and Auditor of Co-operative BankPart 3 : Management of co-operative bank16. Duties of directors and officers of co-operative bank |
| (1) | The provisions of Chapter 5 of the Co-operatives Act apply to this Part with respect to management of co-operative banks. |
| (2) |
| (a) | The directors, managing director and executive officer of a co-operative bank must be appointed in accordance with the conditions provided for in the constitution of such co-operative bank. |
| (b) | The Authority may object to the appointment of a director or the managing director and may, in accordance with section 48, direct the co-operative bank to remove the director within the period stated in the directive. |
| (3) | Each director, managing director and executive officer of a co-operative bank— |
| (a) | owes a fiduciary duty and a duty of care and skill to the co-operative bank of which such a person is director, managing director or executive officer; |
| (b) | must act bona fide for the benefit of the co-operative bank; |
| (c) | must avoid any conflict between the interests of the co-operative bank and the interests of such director, managing director or executive officer, as the case may be; |
| (d) | must possess and maintain the knowledge and skill that may reasonably be expected of a person holding a similar position and carrying out similar functions as are carried out by the director, managing director or executive officer of that co-operative bank; and |
| (e) | must exercise such care in the carrying out of their functions in relation to that co-operative bank as may reasonably be expected of a diligent person holding a similar position, and who possesses both the knowledge and skill mentioned in paragraph (d) and any such additional knowledge and skill as the director, managing director or executive officer may have. |