Featured Product

    RBI Consults on Guidelines on Governance in Commercial Banks in India

    June 11, 2020

    RBI published a discussion paper on governance in commercial banks in India. The objective of the discussion paper is to align the current regulatory framework with global best practices while being mindful of the context of domestic financial system. The comments on the discussion paper will be accepted until July 15, 2020. Based on the feedback, RBI will issue necessary directions or guidelines and provide clarifications, if needed, in respect of any matter covered in the directions or guidelines. The new guidelines or direction shall come into effect within a period of six months after publication or April 01, 2021, whichever is later.

    Improving the quality of governance in financial intermediaries is an important determinant of efficiency in allocation of resources, protection of depositors’ interest, and maintaining financial stability. In this endeavor, the paper has been drafted to encourage stakeholder feedback. The guidelines or directions that are the subject of this discussion paper are intended to:

    • Empower the board of directors to set the culture and values of the organization; recognize and manage conflicts of interest; set the appetite for risk and manage risks within the appetite; and improve the supervisory oversight of senior management
    • Empower the assurance functions through various interventions
    • Achieve clear division of responsibilities between the Board and the management
    • Encourage the separation of ownership from management

    The content in the paper have been compiled after reviewing extant instructions/guidelines/directions of RBI and relevant guidance available in public domain, including those issued by BCBS, FSB, and the Banks Board Bureau. The unique characteristic of financial intermediation and spill-over impact of governance failures on real sector has not been missed while drafting the paper. Therefore, the approach has been to set higher aspirational standards in governance for entities engaged in financial intermediation. The paper must be read along with other governing statutes, regulations, and licensing conditions applicable to banks and the most stringent shall be followed. The discussion paper is applicable to private sector banks, including small finance banks, payments banks, wholly-owned subsidiaries of foreign banks and foreign banks operating in India under branch model. It is also applicable to the State Bank of India, nationalized banks and regional rural banks, except in so far as what is prescribed is not inconsistent with provisions of specific statutes applicable to them or in case where the major shareholder or promoter—that is, the government of India—retains its instructions.


    Comment Due Date: July 15, 2020

    Keywords: Asia Pacific, India, Banking, Governance, Risk Appetite, Operational Risk, Internal Control, Guidelines, Basel, RBI

    Featured Experts
    Related Articles
    News

    BIS Examines Use of Big Data and Machine Learning at Central Banks

    BIS published a paper that provides an overview on the use of big data and machine learning in the central bank community.

    March 04, 2021 WebPage Regulatory News
    News

    APRA Finalizes Reporting Standard for Operational Risk Requirements

    APRA finalized the reporting standard ARS 115.0 on capital adequacy with respect to the standardized measurement approach to operational risk for authorized deposit-taking institutions in Australia.

    March 03, 2021 WebPage Regulatory News
    News

    ECB Publishes Guide for Determining Penalties for Regulatory Breaches

    ECB published a guide that outlines the principles and methods for calculating the penalties for regulatory breaches of prudential requirements by banks.

    March 02, 2021 WebPage Regulatory News
    News

    MAS Sets Out Good Practices to Manage Operational Risks Amid COVID

    MAS and The Association of Banks in Singapore (ABS) jointly issued a paper that sets out good practices for the management of operational and other risks stemming from new work arrangements adopted by financial institutions amid the COVID-19 pandemic.

    March 02, 2021 WebPage Regulatory News
    News

    ACPR Announces New Data Collection Application for Banks and Insurers

    ACPR announced that a new data collection application, called DLPP (Datalake for Prudential), for collecting banking and insurance prudential data will go into production on April 12, 2021.

    March 02, 2021 WebPage Regulatory News
    News

    BCB Maintains CCyB at 0%, Initiates First Cycle of Regulatory Sandbox

    BCB announced that the Financial Stability Committee decided to maintain the countercyclical capital buffer (CCyB) for Brazil at 0%, at least until the end of 2021.

    March 02, 2021 WebPage Regulatory News
    News

    EIOPA Launches Study on Non-Life Underwriting Risk in Internal Models

    EIOPA has launched a European-wide comparative study on non-life underwriting risk in internal models, also kicking-off of the data collection phase.

    March 01, 2021 WebPage Regulatory News
    News

    SRB Publishes Overview of Resolution Tools Available in Banking Union

    SRB published an overview of the resolution tools available in the Banking Union and their impact on a bank’s ability to maintain continuity of access to financial market infrastructure services in resolution.

    March 01, 2021 WebPage Regulatory News
    News

    EBA Consults on Pillar 3 Disclosure Standards for ESG Risks Under CRR

    EBA is consulting on the implementing technical standards for Pillar 3 disclosures on environmental, social, and governance (ESG) risks, as set out in requirements under Article 449a of the Capital Requirements Regulation (CRR).

    March 01, 2021 WebPage Regulatory News
    News

    ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting

    ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting

    March 01, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6655