RBI proposes bank boards focus more on policy than daily operations.
The Reserve Bank of India has issued amendments to the Reserve Bank of India (Commercial Banks – Governance) Directions, 2025, with effect from 1 September 2026, to streamline Board governance and enable bank Boards to focus more effectively on strategy and risk oversight. The amendments reorganize and rationalize provisions relating to matters placed before Boards by deleting certain existing paragraphs and introducing new provisions that clarify the Board’s oversight responsibilities, including supervision of risk management systems, exposures to related entities, and compliance with corporate governance standards.
The revised framework also consolidates policies and matters requiring Board approval, review, or information into appendices for easier reference and permits delegation of specific matters to Board or Management Committees, while retaining ultimate accountability with the Board. Further, the amendments emphasize principles such as clear identification of matters reserved for the Board, adequate flow of information from management, periodic review of delegated matters, and the Chairperson’s responsibility for setting Board agendas. These revised governance and Board practice provisions will apply, with necessary modifications, to both Public Sector Banks and Private Sector Banks.
