RBI plans to revise norms to free up bank's board time
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Mumbai: In a bid to promote ease of doing business, Reserve Bank Governor Sanjay Malhotra on Wednesday proposed to revise and rationalise guidelines to facilitate better utilisation of bank board's time and draft directions in this regard would be released shortly. The matters to be placed before the Boards of banks, along with their periodicity, are determined by the Boards themselves, guided by the seven broad themes prescribed by the Reserve Bank of India.
Meanwhile, the Reserve Bank has also mandated certain policies and matters to be placed before the Board for approval, review, or information. "In an endeavor to enable Boards to utilize its time effectively, and to facilitate a more focused and qualitative engagement on strategy and risk governance, the Reserve Bank has undertaken comprehensive review and rationalisation of all such instructions. Draft directions in this regard will be issued shortly for public consultation," RBI said in its statement on Developmental and Regulatory Policies.
The announcement comes weeks after HDFC Bank Chairman Atanu Chakraborty's abrupt resignation, citing ethical concerns. "Certain happenings and practices within the bank, that I have observed over the last two years, are not in congruence with my personal values and ethics. This is the basis of my aforementioned decision," Chakraborty had said in his resignation letter dated March 17. This is the first time that the part-time chairman of HDFC Bank left mid-way raising concerns over its functioning.
Announcing the Monetary Policy Committee meeting outcome, Reserve Bank Governor Sanjay Malhotra said, "We had recently undertaken a detailed exercise, to consolidate over 9,000 regulatory instructions into 238 Master Directions. A similar consolidation exercise has now been completed for all our supervisory instructions."
The Reserve Bank has constantly endeavored to refine and strengthen its regulatory and supervisory framework while minimising compliance costs, through periodic evaluation of instructions for their continued relevance.
