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Private banks, too, will now have their performance reviewed by their boards.
Reserve Bank of India (RBI) had, a fortnight ago, prescribed seven categories — business strategy, financial reports and their integrity, risk, compliance, customer protection, financial inclusion and human resources — under which boards of private banks can review the performance of their organisations.
“Private sector banks may also adhere to the instructions… to the extent applicable,” said RBI on Thursday in a notification to the managing directors and chief executives of all private sector banks.
In the first bi-monthly monetary policy statement 2015-16, RBI had proposed to do away with the Calendar of Reviews and instead, replace it with the seven critical themes prescribed by the Nayak committee. RBI had said Calendar of Reviews uses up considerable time of the board and, as a result, the board may not be in a position to give focused attention to matters of strategic and financial importance.
The Committee to Review Governance of Boards of Banks in India (under the chairmanship of P J Nayak) had also recommended that discussions in the boards of banks need to be upgraded and greater focus should be on strategic issues.
