RBI amends bank board governance norms, new rules to kick in from Oct 1

Mumbai, The Reserve Bank on Tuesday came up with the final amendments to the ‘matters to be placed before bank boards’ aimed at enhancing at lenders.

The new rules will be applicable from October 1 this year, the central bank said in a notification.

RBI said the new set of rules adopts a principles-based approach that focuses on giving bank boards the freedom to formulate their agendas based on each bank’s specific priorities.

However, it was quick to add that on critical areas like risk, compliance, , and continues.

As per the amended rules, a bank board may decide on a mechanism for implementing decisions taken at meetings and did not accept the suggestions seeking a continuation of the ” mechanism.

The RBI has done away with the requirement to define materiality based on stakeholder feedback. It is expected that the entire board would be consulted for setting the agenda of the meeting; however, the primary responsibility for the same should rest with the chairperson, as it was made clear.