RBI Governor Sanjay Malhotra Says Regulators Cannot Replace Boardroom Decisions

The Reserve Bank of India’s (RBI) Governor Sanjay Malhotra said the central bank does not intend to micromanage lenders and that decision-making must rest with bank Boards. “No regulator can, or should, substitute for boardroom judgement,” Malhotra said at the SBI Banking and Economics Conclave 2025.

Malhotra noted that banks should be free to take case-specific decisions while ensuring prudent risk management. He highlighted that Indian banks are stronger today, supported by reforms such as allowing financing of acquisitions and introducing the expected credit loss framework. He cited SBI’s turnaround from losses in 2018 to becoming a USD 100 billion company as an example of sectoral improvement. Deputy Governor T. Rabi Sankar, also speaking at the event, said bank-reported frauds per transaction have risen since July and that RBI is using digital tools to detect such activity.