Finance Ministry Directs PSBs To Conduct Independent Board Evaluations

The Ministry of Finance has directed public sector banks (PSBs) to undertake independent third-party evaluations of their Board performance.

This move follows recent governance concerns at some banks. A senior government official stated that the assessment will cover board composition, oversight, ethics, risk management, and alignment with institutional strategy. Banks including SBI, Bank of Baroda, PNB, Union Bank, and Central Bank have initiated the process, while others will follow. Consultancies such as Deloitte and KPMG are conducting the reviews. Former Punjab & Sind Bank MD S. Krishnan noted that such evaluations are a global practice and can improve accountability, though banking sector reviews require confidentiality.

The directive comes amid scrutiny of recent incidents at IndusInd Bank and Union Bank of India.