In a major change of stance, Reserve Bank of India (RBI) has confirmed Naina Lal Kidwai’s position as chief executive officer (CEO) of HSBC India, even while allowing her to continue on the global board of foods major Nestle SA. RBI had earlier withheld Kidwai’s confirmation as CEO until she gave up her seat on the Nestle board, citing a potential conflict of interest.An RBI official confirmed that Kidwai’s position as CEO of HSBC India has now been confirmed by the central bank, with the condition that HSBC would not have a banking relationship with Nestle. The clearance, sources said, came through about a month ago.The RBI move to withhold Kidwai’s appointment as CEO, had generated intense debate and discussion, since the position on the Nestle SA board was generally seen as an acknowledgement of Indian managerial talent. The central bank’s refusal to confirm her appointment meant that Kidwai would not have been able to attend meetings called by RBI in her capacity as the India boss of HSBC, since the regulator would not recognise her officially as head of the bank.Kidwai was unavailable for comment. Kidwai, 49, was conferred the Padma Shri this year. She was elected to the Nestle SA board by the company’s shareholders at an annual general meeting on April 6, 2006. A month later, on May 5, she succeeded Niall SK Booker as the India CEO of HSBC.At that time, HSBC had also said the appointment conformed to the “exacting standards” of corporate governance, and having bankers sit on the boards of international companies was in line with global practice. The banking regulator had not agreed with that argument then and insisted Kidwai step down from Nestle’s board as a pre-condition to ratifying her appointment at the bank.
