Reserve Bank of India amends payments bank governance rules, narrows mandatory board agenda items and sets revised oversight principles

The Reserve Bank of India has amended its governance directions for payments banks to rationalize what must be placed before bank boards and to refocus board time on strategy and risk governance. The changes replace parts of the existing framework with a more principles-based structure that clarifies the Board’s oversight role and distinguishes between matters that must come to the Board and those that may be delegated. Under the amendments, the Board’s oversight is expressly centered on the bank’s risk management system, policy and strategy, exposures to related entities, and compliance with corporate governance standards, including committee composition, roles, meeting frequency and review functions. Several existing provisions are deleted, Chapter V is retitled from board meeting procedures to matters to be placed before the Board, and new provisions state that policies requiring Board approval, policies whose approval can be delegated, and other matters requiring Board approval, review or information, as well as delegable non-policy matters, will be specified in appendices. The amendments also set guiding principles for determining board agenda items, including the Board’s ultimate responsibility for strategy, financial soundness, governance, risk management and compliance, the need to reserve sufficient time for strategy and risk oversight, the Chairperson’s responsibility for setting the agenda, management’s duty to provide sufficient information, and periodic review of both Board and committee delegations. The amendments take effect on October 1, 2026. From that date, the directions and circulars listed in the appendices will stand modified to the extent indicated there.