RBI's New Governance Directions for Commercial Banks 2025
Current · Source: Reserve Bank of India · RBI/DOR/2025-26/149 · issued 28 Nov 2025 · ~1 min read
Quick answerRBI issued consolidated governance directions for commercial banks, covering board structure, key appointments, and fit-and-proper criteria. Effective immediately, these rules apply to PSBs, PVBs, and foreign banks, with specific chapters for each. Non-scheduled banks get limited exemptions on CRO and CFO/CTO appointments.
The rule, in the simplest words
All commercial banks (except SFBs, payment banks, and LABs) must follow a single set of governance rules that cover board structure, committee mandates, and key appointments such as CRO, CFO, and CTO.
The rules are divided into chapters for Public Sector Banks (PSBs), Private Sector Banks (PVBs), and foreign banks; each bank follows the chapter that matches its type unless its own laws say otherwise.
Non‑scheduled banks are exempt from the CRO and CFO/CTO appointment rules, but they still need to keep fit‑and‑proper checks for directors and other key staff.
For the CTO (and similar roles) the fit‑and‑proper criteria require an engineering graduate or MCA (or equivalent) from a recognised university, 15 years of experience in banking‑IT or related fields, with at least 5 years at senior management level.
How it plays out — a real example
Anita, a branch manager at a private sector bank in Bangalore, is tasked with ensuring her bank’s board composition meets the new RBI rules. She contacts the HR team to confirm that the proposed CTO candidate has an engineering degree and 15 years of IT experience, including 5 years in senior management, as required by the fit‑and‑proper criteria.
What changed
RBI consolidated and updated governance norms for all commercial banks into a single master direction, replacing earlier piecemeal instructions. The new directions specify board composition, committee mandates, and appointment processes for key roles like CRO, CFO, and CTO separately for PSBs, PVBs, and foreign banks. Non-scheduled commercial banks are exempt from certain provisions on CRO and CFO/CTO appointments.
What it means for you
Banks must align their board structures and key management appointments with the new consolidated framework, ensuring consistency across the sector. PSBs need to comply with Chapter II provisions unless inconsistent with their statutory acts, while PVBs and foreign banks follow their respective chapters. The immediate effect requires banks to review and possibly revise their governance policies and appointment procedures without delay.
What you must do
Review the full direction to identify specific requirements applicable to your bank's category (PSB, PVB, or foreign bank).
Update board composition, committee charters, and appointment processes for CRO, CFO, CTO, and other key roles to comply with the new norms.
Ensure fit-and-proper criteria for directors and key executives are documented and followed as per the direction.
For non-scheduled banks, confirm exemption applicability and adjust compliance accordingly.
Who it affects
All commercial banks (excluding SFBs, payment banks, and LABs), Public sector banks, Private sector banks, Foreign banks operating in India, Non-scheduled commercial banks
❓ Common questions
When do these governance directions take effect?
The directions come into force with immediate effect from the date of issuance, as stated in the notification.
📜 Read the original circular — full text as issued by RBI
Qualification : Engineering Graduate or MCA or equivalent qualification from a recognized University / Institution.
Experience : Fifteen years of experience in relevant areas viz. Banking-IT related areas / projects involving IT Policy and Planning / Financial Networks and Applications / Financial Information Systems / Cyber Security Technologies / Payment Technologies, etc., of which five years shall be at senior management level.
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/DOR/2025-26/149 · issued 28 Nov 2025. The plain-English explanation above is BankPulse’s own independent summary.
Example: if you are a Compliance officer at a bank this circular applies to (All commercial banks (excluding SFBs, payment banks, and LABs), Public sector banks, Private sector banks, Foreign banks operating in India, Non-scheduled commercial banks), your first concrete step on “RBI's New Governance Directions for Commercial Banks 2025” is: “Review the full direction to identify specific requirements applicable to your bank's category (PSB, PVB, or foreign bank).” (RBI issued this 28 Nov 2025).
Circular: RBI/DOR/2025-26/149 -- RBI's New Governance Directions for Commercial Banks 2025
Issued: 28 Nov 2025
Action required: Review the full direction to identify specific requirements applicable to your bank's category (PSB, PVB, or foreign bank).
Action required: Update board composition, committee charters, and appointment processes for CRO, CFO, CTO, and other key roles to comply with the new norms.
Action required: Ensure fit-and-proper criteria for directors and key executives are documented and followed as per the direction.
Action required: For non-scheduled banks, confirm exemption applicability and adjust compliance accordingly.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13161&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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