The Reserve Bank of India (RBI), on November 28, 2025, issued the Reserve Bank of India (Commercial Banks – Governance) Directions, 2025 to establish a uniform, strengthened governance architecture for commercial banks. The Directions apply to public sector banks (PSBs), private sector banks (PVBs), and foreign banks (FBs), with chapter-specific provisions for each category. They define applicability, clarify exemptions for non-scheduled commercial banks, and mandate alignment with governing statutes such as the BR Act, SBI Act, and related acquisition Acts.
The RBI sets comprehensive standards for board composition, board practices, and roles of directors, distinguishing requirements for PSBs and PVBs. These include norms for independent directors, tenure limits, restrictions to ensure separation of ownership and management, and strengthened oversight responsibilities. The Directions also detail mandatory board committees (Audit, Risk Management, Nomination & Remuneration, IT Strategy, etc.), fit-and-proper criteria for elected directors, and governance requirements for senior management appointments (CRO, CFO, CTO, CVO, Company Secretary).
The RBI further provides frameworks for remuneration of directors, whole-time directors, MD/CEO and material risk-takers, governance expectations from foreign bank branches and subsidiaries, and reporting/compliance obligations. The Directions include repeal and saving provisions, ensuring that these governance norms supersede earlier circulars and remain binding unless inconsistent with statutory provisions.
[Notification No. RBI/DOR/2025-26/149]
