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

    APRA Reviews Repayment Deferral Plans, Identifies Best Practices

    APRA has concluded its review of the comprehensive plans of authorized deposit-taking institutions for the assessment and management of loans with repayment deferrals.

    September 22, 2020 WebPage Regulatory News
    News

    ESAs Assess Risks to Financial Sector After COVID-19 Outbreak

    ESAs (EBA, EIOPA, and ESMA) published the first joint report that assesses risks in the financial sector since the outbreak of the COVID-19 pandemic.

    September 22, 2020 WebPage Regulatory News
    News

    BoE Confirms Withdrawal of COVID Corporate Financing Facility

    BoE and HM Treasury confirmed that the COVID Corporate Financing Facility (CCFF) will close for new purchases of commercial paper, with effect from March 23, 2021.

    September 22, 2020 WebPage Regulatory News
    News

    ECB Allows Temporary Relief in Leverage Ratio Amid COVID-19 Pandemic

    ECB published a decision allowing the euro area banks under its direct supervision to exclude certain central bank exposures from the leverage ratio.

    September 21, 2020 WebPage Regulatory News
    News

    ESAs Launch Survey on Templates for Product Disclosures Under SFDR

    ESAs launched a survey seeking feedback on the presentational aspects of product templates under the Sustainable Finance Disclosure Regulation (SFDR or Regulation 2019/2088).

    September 21, 2020 WebPage Regulatory News
    News

    ECB Proposes Integrated Reporting Framework to Reduce Burden for Banks

    ECB published input of the European System of Central Banks (ESCB) into the EBA feasibility report on reducing the reporting burden for banks in EU.

    September 21, 2020 WebPage Regulatory News
    News

    EC Deems UK Framework for CCPs Temporarily Equivalent to EMIR Rules

    EC adopted a decision determining, for a limited period of time, that the regulatory framework applicable to central counterparties, or CCPs, in the UK and Northern Ireland is equivalent to the requirements laid down in the European Market Infrastructure Regulation (EMIR or Regulation 648/2012).

    September 21, 2020 WebPage Regulatory News
    News

    EBA to Phase Out Guidelines on Loan Repayment Moratoria

    EBA has decided to phase out the guidelines on legislative and non-legislative moratoria of loan repayments, in accordance with the earlier specified end of September deadline.

    September 21, 2020 WebPage Regulatory News
    News

    EBA Provides Opinion on Definition of Credit Institution in CRR

    EBA published an Opinion addressed to EC to raise awareness about the opportunity to clarify certain issues related to the definition of credit institution in the upcoming review of the Capital Requirements Directive and Regulation (CRD and CRR).

    September 18, 2020 WebPage Regulatory News
    News

    ECB Finalizes Methodology to Assess CCR and A-CVA Risk of Banks

    ECB finalized the guide on assessment methodology for the internal model method for calculating exposure to counterparty credit risk (CCR) and the advanced method for own funds requirements for credit valuation adjustment (A-CVA) risk.

    September 18, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5820