The Reserve Bank of India amended its governance directions for small finance banks to align disclosures on remuneration and share-linked instruments with revised Basel Pillar 3 requirements. The amendments redirect the applicable disclosure references from the financial statement presentation and disclosure directions to the prudential capital adequacy directions, complementing the corresponding removal of these provisions from the financial statement rules. They take effect April 1, 2027. Share-linked instruments must remain part of variable pay, comply with statutory requirements and be addressed in each bank’s compensation policy. Banks must value them at grant using the Black-Scholes model and recognize the resulting fair value as an expense beginning in the accounting period for which approval was granted. Remuneration of whole-time directors, the managing director and chief executive officer, and material risk takers must be disclosed at least annually in accordance with the prudential capital adequacy directions.
2026-07-30Reserve Bank of India
Reserve Bank of India aligns small finance bank remuneration disclosures with Basel Pillar 3 from April 2027
The Reserve Bank of India aligned small finance bank disclosures on share-linked compensation and senior employee remuneration with Basel Pillar 3 requirements. The amendments, including valuation and annual disclosure requirements, take effect April 1, 2027.