RBI Proposes Shift In Bank Board Role Towards Policy Oversight

Reserve Bank of India (RBI) has proposed revised guidelines for bank Boards, asking them to focus on policy, strategy, and risk oversight instead of daily operations. The draft states that Boards will remain responsible for performance, conduct, and control, while allowing operational matters to be handled by management or sub-committees.

The proposal requires Boards to oversee risk systems, monitor exposure to related entities, and review investments in subsidiaries. It also calls for clear identification of matters that need Board approval or periodic review, along with adherence to Corporate Governance standards. The move follows developments at HDFC Bank, where leadership differences highlighted concerns over board involvement in operational matters.

The central bank said the revised framework adopts a principle-based approach, replacing earlier detailed guidelines. It has invited public feedback on the draft norms until May 7, 2026.