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Informist, Wednesday, Apr. 8, 2026

--RBI releases draft directions on governance in banks 

NEW DELHI – The Reserve Bank of India has proposed streamlining the items placed before the boards of banks to improve the quality of engagement on strategy and risk governance. The move is an "endeavour to enable bank boards to utilise their time effectively," the central bank said in draft norms issued today. The RBI has sought feedback on the draft norms by May 7.

Currently, the matters to be placed before the boards of banks, along with their periodicity, are determined by the board itself, guided by the seven broad themes prescribed by the RBI. In addition, the central bank mandates that certain policies and matters be placed before the board for approval, review, or information. 

In an endeavour to enable boards to utilise their time effectively and to facilitate more focused, qualitative engagement on strategy and risk governance, the Reserve Bank has undertaken a comprehensive review and rationalisation of instructions, the RBI said. The RBI has also replaced the seven broad themes with principle-based guidance.

According to the central bank, the ultimate responsibility for the bank's performance, conduct, and control rests with the board. "It may, however, delegate certain matters to the Board Committees/Sub-Committees/Senior Management, along with reporting requirements as may be necessary," RBI said. The board will also clearly articulate the matters reserved for its approval or to be brought to its notice for information or reporting, while ensuring sufficient time is dedicated to strategy and risk governance.

The draft norms will come into force from Sept. 1. As per the draft norms, policy matters prescribed by the RBI for approval by the board include credit policy, investment policy, risk management policy of bank, policy on digital banking, information technology policy, policy on deposits or other liability products, policy on 'Fit & Proper' assessment of major shareholders, and compliance-related matters policy. None of the policies mentioned can be delegated by the board to other subcommittees for consideration, the central bank said.  End

Reported by Priyasmita Dutta

Edited by Saji George Titus

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