The Reserve Bank of India has amended its 2025 commercial bank governance directions to rationalize which matters must be placed before bank boards, with the aim of giving boards more time for strategy and risk governance. The changes recast board oversight requirements, introduce a principle-based framework for deciding what must go to the board versus what may be delegated, and override inconsistent requirements in existing RBI circulars and directions to the extent set out in the appendices. Under the amendments, boards must exercise oversight over the bank's risk management system, policy and strategy, exposures to related entities including lending to or investment in subsidiaries, and conformity with corporate governance standards. The new framework distinguishes between policies that require board approval and those for which approval can be delegated, while allowing review of board-approved policies to be delegated to board committees with the board approving only material amendments. For non-policy matters, the directions separate items that must go to the board for approval, review or information from those that may be delegated at the board's discretion. Boards retain ultimate responsibility for strategy, financial soundness, key personnel decisions, governance, risk management and compliance, and must clearly define reserved matters, reporting lines, and the information they require from management. The chairperson is given primary responsibility for setting the meeting agenda, and boards must periodically review both delegated matters and the quality and timeliness of board materials. The amendments also align the provisions for private sector banks with those for public sector banks through the existing governance directions. The changes take effect on October 01, 2026, and the directions and circulars listed in the appendices will stand modified from that date to the extent indicated there.
Reserve Bank of India2026-07-14
Reserve Bank of India amends bank governance directions to streamline matters requiring Board attention
The Reserve Bank of India has amended its commercial bank governance directions to reduce prescriptive board agenda requirements and refocus boards on strategy and risk governance. The changes set out which matters must go to the board, what may be delegated to committees or management, and confirm that both public sector and private sector bank boards remain ultimately responsible for governance, risk and compliance. The amendments take effect on October 01, 2026.