RBI rationalises board agenda rules for small finance banks
Regulator relaxes detailed board approval mandates, shifting focus to strategy and risk governance from October 1, 2026.
What changed
- Deleted paragraphs 21, 28, 30-33 of governance directions
- Inserted new paragraphs 33A and 33B specifying policies and matters for board
- Effective date: October 1, 2026
The read
RBI has overhauled board governance rules for small finance banks, deleting multiple paragraphs and inserting new provisions that streamline what must be placed before the board. The amendment, issued under Section 35A of the Banking Regulation Act, allows banks to delegate policy reviews and routine matters to committees, reserving board time for strategy, risk, and compliance. The central bank’s move, effective October 1, 2026, reflects a principle-based approach: boards retain ultimate responsibility but can focus on material issues. For small finance banks, this is a welcome simplification that reduces compliance clutter without weakening oversight. Vendict: regulation that trusts boards to prioritise.
Key numbers
- Effective date: October 1, 2026
- Section 35A of Banking Regulation Act
Primary source: rbi.org.in