RBI/2026-27/<>
DOR.HGG.GOV. /29.67.001/2026-27

DD-MM-YYYY

Draft Reserve Bank of India (Commercial Banks – Governance) Amendment Directions, 2026

Please refer to the Reserve Bank of India (Commercial Banks - Governance) Directions, 2025 (hereinafter referred to as ‘Directions’).

2. In an endeavour to enable bank Boards to utilize their time effectively and to facilitate a more focused and qualitative engagement on strategy and risk governance, it has been decided to undertake a review to rationalize the extant RBI directions/circulars on the matters required to be placed before the Boards. Accordingly, in exercise of the powers conferred by Section 35A of the Banking Regulation Act, 1949 and all other provisions / laws enabling the Reserve Bank of India in this regard, the Reserve Bank of India, being satisfied that it is necessary and expedient in public interest so to do, hereby, issues the Amendment Directions hereinafter specified.

3. The Amendment Directions modify the Directions as under:

3(1) Paragraph 15 of Chapter II shall be deleted and reinserted after paragraph 11 as under:

“11A. The Board shall exercise oversight on the following:

(i) risk management system, policy and strategy followed by the PSB;

(ii) exposures to related entities of the PSB, viz. details of lending to / investment in subsidiaries, the asset classification of such lending / investment, etc.; and

(iii) conformity with corporate governance standards viz. in composition of various committees, their role and functions, periodicity of the meetings and compliance with coverage and review functions etc.”

3(2) Paragraph 14, 16, 17, 18 and 19 of Chapter II shall be deleted.

3(3) After paragraph 19 of Chapter II, the following new sub-section and paragraphs shall be inserted as under:

“B1. Matters to be placed before the Board

19A.The Reserve Bank has mandated through various directions/circulars issued from time to time, that certain policies and other matters for approval/review/information be placed before the Board. The policies and other matters along with the relevant paragraph reference of directions/circulars have been compiled in Appendix I and Appendix II respectively, for ease of reference of banks. The Board may at its discretion, delegate certain aspects of these matters to a Board Committee/ Management Committee, as indicated in the Appendices. The review of policies required to be placed before the Board for approval may be delegated to Board Committees, with the Board approving only material amendments to such policies. The contours of ‘material amendments’, to the extent feasible, shall be defined by the Board.

19B. In addition to the matters specified in Appendix I and Appendix II, the matters to be placed before the Board may be determined based on the following key principles:

(i) The ultimate responsibility for the bank’s performance, conduct and control rests with the Board. It may, however, delegate certain matters to the Board Committees / Sub-Committees / Senior Management, along with reporting requirements as may be necessary.

(ii) The Board shall clearly articulate the matters reserved for its approval or to be brought to its notice for information or reporting. The role and responsibilities of the Board under various statutes or regulations, may also be taken into account in determining such matters. However, the Board shall ensure that sufficient time is dedicated to strategy and risk governance.

(iii) The Chairperson of the Board shall have the primary responsibility for setting the agenda of the meeting.

(iv) The Board shall ensure that it receives sufficient information from the management to discharge its role effectively. It shall clearly define the nature, level of detail and frequency of information required from the management. The Board may rely on this information but may seek external reports, if needed.

(v) The Board shall periodically review the matters to be placed before it as well as the matters delegated to the Board Committees / Sub-Committees / Senior Management. The review shall also include the timelines for circulation of agenda items, adequacy of information captured in the agenda, time allotted for important matters, etc.”

3(4) Paragraph 52 of Chapter III shall stand modified as under:

“52. The responsibilities of the Board of Directors of a Public Sector Bank (PSB) set out in paragraphs 8 to 11A of these Directions shall, mutatis mutandis, apply to the Board of a PVB.”

3(5) Paragraph 57 of Chapter III shall stand modified as under:

“57. The provisions pertaining to Board Structure and Practices for a PSB as specified in paragraphs 12 to 19B of these Directions shall, mutatis mutandis, apply to a PVB.”

4. These Amendment Directions shall come into force from September 01, 2026.

(Scenta Joy)
Chief General Manager