The Reserve Bank of India (RBI) has released draft guidelines aimed at refocusing the work of bank boards toward strategic, risk, and governance matters, rather than routine operational decisions. The move is part of a broader rationalisation of the central bank’s instructions to banks’ boards, designed to reduce agenda clutter and improve governance.
Under the draft, boards are expected to concentrate on setting and overseeing risk‑management frameworks, business strategy, and key policies, while delegating many day‑to‑day operational approvals to management and internal committees. The RBI plans to shift several routine compliance and approval items currently placed before boards to lower‑level forums, under clearly defined principles on what requires board‑level review.
RBI Governor Sanjay Malhotra said the central bank had undertaken a comprehensive review and rationalisation of all instructions that require the attention of bank boards in order to “facilitate better utilisation of bank boards’ time” and enable a more focused and qualitative engagement on strategy and risk governance. Speaking after the central bank’s policy meeting, he stated, “We propose to revise and rationalise matters that require the attention of the board. This will result in boards being able to divert more time to policy matters, leaving operational matters to the management.” Malhotra added that the initiative followed feedback from banks asking for a clearer separation between policy oversight and operational execution.
The central bank says the change follows feedback from banks that existing guidance led to overloaded board agendas and blurred roles between policy‑making and micromanagement. The revised framework also comes amid heightened scrutiny of governance practices at some large banks, underscoring the need for sharper board oversight and clearer accountability.
The draft replaces older, theme‑based instructions such as separate lists for finance, HR, and compliance with a more principle‑based structure that applies across public and private banks. This structure emphasises strategy, risk, and governance compliance, as well as adequate oversight of exposures to related parties and group entities.
The draft guidelines are open for public consultation until May 7, 2026, with the revised framework expected to take effect from September 1, 2026. If adopted as proposed, the norms would require banks to re‑evaluate how they structure board time, delegate routine approvals, and strengthen their risk‑governance reporting.
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