The Reserve Bank of India (RBI) on November 28, 2025 issued the Reserve Bank of India (Small Finance Banks – Governance) Directions, 2025, establishing a comprehensive governance framework for Small Finance Banks (SFBs). These Directions consolidate and modernise governance norms to ensure professional management, accountability, board diversity, and robust oversight within SFBs.
The framework prescribes standards for board constitution, director eligibility, and ‘fit and proper’ criteria, including age limits, integrity checks, qualification requirements, and experience norms under Section 10A of the Banking Regulation Act. It also outlines rules for appointment and functioning of MD&CEO, whole-time directors, part-time chairpersons, and mandates key board committees such as Audit, Risk Management, and Nomination & Remuneration Committees. Provisions further regulate appointment of CRO, CFO, and CTO (with exemptions for non-scheduled SFBs), remuneration principles including malus and clawback, and reporting obligations to the RBI.
[Notification No. RBI/DOR/2025-26/180]
