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
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.