The Reserve Bank of India amended its commercial bank governance directions to align private sector banks’ remuneration disclosures with the Basel Pillar 3 framework under the prudential norms on capital adequacy. The changes take effect on April 1, 2027. Share-linked instruments must form part of variable pay, with grant standards incorporated into each bank’s compensation policy and related disclosures made under the prudential capital adequacy directions. Banks must fair value these instruments at the grant date using the Black-Scholes model and recognize the resulting expense from the accounting period for which approval was granted. At least annually, they must also disclose remuneration for whole-time directors, managing directors and chief executive officers, chief executive officers and material risk takers.
Reserve Bank of India2026-07-30
Reserve Bank of India aligns private sector bank remuneration disclosures with Basel Pillar 3 from April 2027
The Reserve Bank of India aligned private sector bank remuneration disclosures with Basel Pillar 3 requirements, effective April 1, 2027. The amendments cover annual disclosures for senior executives and material risk takers, as well as the policy treatment, valuation and disclosure of share-linked variable pay.