Reserve Bank of India (RBI) Governor Sanjay Malhotra at a press conference after the announcement of the first bi-monthly monetary policy for the current fiscal, at RBI headquarters in Mumbai, Wednesday, April 8, 2026. (PTI Photo)
The Reserve Bank of India (RBI) plans to revise guidelines for bank boards to encourage a greater focus on policy matters rather than involvement in day-to-day operations, Governor Sanjay Malhotra said on Wednesday.
Malhotra said he had been hearing from the boards that many operational matters were also coming to them, as a result of which they were unable to concentrate on real policy and strategic issues. “That’s the reason why we have brought this up,” he said.
The regulations in the banking system are adequate, and that the central bank remains watchful, looking to deal with specific issues on a case-by-case basis, Malhotra said after unveiling the monetary policy.
This comes after the recent controversy at HDFC Bank, where then Chairman Atanu Chakraborty resigned out of the blue, citing differences on ‘values and ethics’. Some other banks such as IDFC FIRST Bank and IndusInd Bank were also under the spotlight due to various challenges previously.
“I want to assure everyone that the banking system is very resilient. It’s very safe, strong, (with a) number of regulations related to conduct, governance, prudence, liquidity, along with our supervisory framework. They keep the banking system very healthy and robust,” he said while addressing the media. Some of these issues are specific to a certain bank, and the central bank remains vigilant, with law enforcement also stepping in whenever needed, said Malhotra.
“These are entity-specific developments and do not pose any systemic risk at this point of time. As they (such issues) play out, we deal with them on a bilateral basis,” said Deputy Governor Swaminathan Janakiraman.
Last week, the Securities and Exchange Board of India’s Chairman Tuhin Kanta Pandey said the regulator is planning a joint initiative to build the capacity of independent directors and strengthen corporate governance through collaboration with regulators, industry, professional bodies and academic institutions.
Story continues below this ad
According to the chairman, companies that perform, innovate and are technologically adept are of abiding interest to its investors. “Therefore, independent directors are not there only for compliance and pointing fingers at management but also for supporting and finding solutions through accountability. They need to bear this responsibility in mind,” he said.
The central bank also clarified that the recent curbs imposed on banks dealing in foreign exchange were temporary measures to curb excessive volatility, and may be reversed if the situation is normalised. “… we did notice that in the last few weeks of March, there was heightened volatility in the forex market. We saw positions were being built up leading to arbitrage positions between the non-deliverables and deliverables markets,” Malhotra said.
© The Indian Express Pvt Ltd
