A column in Business Standard argues that improving bank governance in India relies more on transforming board processes than on regulatory rules, highlighting the need for greater strategic oversight and effective decision-making.
The Reserve Bank of India has spent years trying to jolt bank boards into becoming more active, but a column in Business Standard argues that better governance will depend less on fresh rules than on how boards actually work.
The piece says the effort began under former governor Shaktikanta Das, who started meeting separately with the boards of public and private sector banks. At one such session, Das reportedly urged directors to let younger executives speak more freely, a reminder that even the top table can learn from those lower down. The column treats that as evidence of a wider problem in bank culture, not just in the central bank’s supervisory approach.
That concern comes against a broader regulatory push. According to the RBI, Das had already told banks in July 2024 to strengthen governance, risk management and compliance culture, while also acknowledging gains in asset quality, provisioning, capital and profitability. Reuters has also reported repeated RBI warnings in recent years over governance lapses at some private banks, including the need for better conduct in board appointments, committee composition and chairperson selection.
The RBI’s own rulebook has also been tightened. In late 2025, the central bank consolidated thousands of circulars into 238 master directions in an effort to simplify compliance. The column says amendments to the governance directions were meant to reduce the time boards spend on routine “noting” items, which had swollen to the point that meetings were being consumed by paperwork rather than real oversight.
Yet the author says the latest changes do not go far enough. The RBI’s earlier framework had set out seven themes for bank boards, from business strategy and risk management to customer protection and human resources. But the amended version, the column argues, still leaves too much unclear about what boards should actively debate, approve or simply receive for information.
The bigger issue, it says, is process. Four quarterly meetings are not enough for a bank board to handle strategy, inspection findings, risk reports and ad hoc regulatory problems, especially when presentations are dumped on directors at the last minute. The column also criticises “table” items rushed in at the end of meetings and board evaluations that are said to be little more than formality. In the author’s view, the RBI can set expectations, but banks themselves must overhaul how their boards prepare, debate and decide.
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