RBI Revises Bank Board Governance Norms, Shifts Routine Functions To Committees

The Reserve Bank of India (RBI) has revised governance norms for bank Boards, limiting their role to strategy, risk oversight and Corporate Governance while allowing board committees to handle routine operational matters. The revised framework will come into effect from October 1, 2026.

Under the new norms, Boards will continue to approve policies related to credit, investments, risk management, information technology, compliance, KYC, compensation, and responsible business conduct. However, periodic reviews of these policies can be carried out by board committees, with only material changes requiring approval from the full Board. The RBI has clarified that delegated powers can only be assigned to board committees and sub-committees, and not to senior management. Boards will remain responsible for overseeing risk management systems, related-party exposures, and Corporate Governance standards.

The central bank has also consolidated multiple governance guidelines into a single principle-based framework to define responsibilities between bank Boards, committees, and management.