What changed
RBI withdrew 8 additional circulars for PSBs, following a September 2007 review. The withdrawn circulars cover topics like OTS for small farmers, bank nominees on company boards, VRS accounting, branch closures, disciplinary proceedings, and business-per-employee reporting.
What it means for you
PSBs can now discontinue following these specific RBI instructions unless they choose to retain them via board-approved policies. This reduces regulatory burden but requires banks to assess whether internal policies are needed to replace withdrawn guidelines.
What you must do
- Review the 8 withdrawn circulars listed in the annex to understand their subject matter.
- Assess if any instructions from these circulars are still relevant for your bank's operations.
- If relevant, ensure board-approved policies or procedures are in place to substitute the withdrawn circulars.
- Document the review and policy adoption process for audit and compliance records.
Who it affects
All Public Sector Banks (PSBs), Board of Directors of PSBs, Compliance and policy teams at PSBs
What are the 8 circulars being withdrawn?
They cover: OTS for small/marginal farmers (loans up to Rs 50,000), bank nominees on company boards, VRS expenditure accounting (3 circulars), branch closures due to VRS, pending departmental inquiries, and average business per employee reporting.
Do we need to stop following these instructions immediately?
Not necessarily. If the instructions are still relevant, you must adopt board-approved policies to continue them. Otherwise, you can discontinue compliance.
Is this withdrawal applicable only to PSBs?
Yes, the circular is addressed to all Public Sector Banks. Other bank categories are not directly affected.