The Reserve Bank of India (RBI) will soon reconstitute the board of directors of

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Bank of Rajasthan, which was formed when Pravin Kumar Tayal was in control of the bank.

RBI has already ensured that the Tayal family is de-recognised as promoter of the bank and has appointed its nominees to take control of the management.

“RBI has indicated that the board will have to be completely revamped, but there is no written communication so far,” people close to the developments in Bank of Rajasthan told Financial Chronicle.

A senior official of the bank, who did not want to be named, said, “The board will undergo a revamp but the regulator has not communicated anything officially to the bank yet.”

According to him, Sanjay Kumar Tayal, son of Pravin, is the only board member who belongs to the significant promoter group.

RBI’s immediate target will be Sanjay. Both father and son are among 100 entities barred by the Securities & Exchange Board of India (Sebi) on Monday from dealing in securities for violating takeover and other regulations.

Asked about RBI’s reported move, Pravin told Financial Chronicle: “I don’t have any appointees on the board. They are all independent directors and have been cleared by the regulator from time to time. Hence I don’t think they need to be replaced. But if the regulator plans to replace them I don’t know what its thinking behind this is.”

On November 20 last year RBI had appointed G Padmanabhan, a former chief general manager of State Bank of India as Bank of Rajasthan’s managing director and chief executive officer.

RBI followed up with the induction of M Ravindra Vikram, a chartered accountant, and V Seshadri, a legal consultant, as directors on the bank’s board on December 14.

Banking officials said RBI would not brook the continuation of a tainted person on the board of a sensitive institution like bank. With Sebi initiating proceedings against Sanjay, he no longer qualifies under the ‘fit and proper’ criterion of RBI.

RBI’s guidelines say directors and the CEO who manage the affairs of a bank should be ‘fit and proper’ and observe sound corporate governance principles.

Sanjay and father Pravin could not continue as non-executive chairman since 2004 as RBI did not clear his reappointment. Pravin was non-executive chairman from 1999 to 2004.

RBI had a couple of weeks ago imposed a fine of Rs 25 lakh on Bank of Rajasthan for violating regulatory directions regarding acquisition of immovable properties, deletion of records from the bank’s IT system, non-adherence to know-your-customer guidelines and anti-money laundering guidelines in the opening and conduct of certain accounts.