Follow Us:

The Reserve Bank of India issued the Reserve Bank of India (Payments Banks – Governance) Amendment Directions, 2026 to amend the Reserve Bank of India (Payments Banks – Governance) Directions, 2025. The amendments are intended to enable bank Boards to utilise their time more effectively and facilitate more focused engagement on strategy and risk governance by rationalising existing RBI directions and circulars relating to matters required to be placed before the Board. The amendments reinsert Paragraph 23, with modifications, as new Paragraph 16A requiring the Board to exercise oversight over the bank’s risk management system, policy and strategy, exposures to related entities, and conformity with corporate governance standards. They also delete Paragraph 17 of Chapter IV and Paragraphs 22, 24, 25, 26 and 27 of Chapter V, rename Chapter V as “Matters to be placed before the Board,” and insert new Paragraphs 27A and 27B specifying policies requiring Board approval, matters requiring Board approval, review or information, delegable matters, and governance principles relating to Board responsibilities, delegation, agenda setting, information requirements and periodic review. The Amendment Directions come into force on October 1, 2026.

Reserve Bank of India

RBI/2026-27/179
DOR.HGG.GOV.152/29.67.001/2026-27 | Dated: July 14, 2026

Reserve Bank of India (Payments Banks – Governance) Amendment Directions, 2026

Please refer to the Reserve Bank of India (Payments Banks – Governance) Directions, 2025 (hereinafter referred to as ‘Directions’).

2.In an endeavour to enable bank Boards to utilize their time effectively and to facilitate a more focused and qualitative engagement on strategy and risk governance, it has been decided to undertake a review to rationalize the extant RBI directions/circulars on the matters required to be placed before the Board. Accordingly, in exercise of the powers conferred by Section 35A of the Banking Regulation Act, 1949 and all other provisions / laws enabling the Reserve Bank of India in this regard, the Reserve Bank of India, being satisfied that it is necessary and expedient in public interest so to do, hereby, issues the Amendment Directions hereinafter specified.

3.The Amendment Directions modify the Directions as under:

3(1) Paragraph 23 of Chapter V shall be deleted and reinserted (with slight modification) after paragraph 16 as under:

“16A. The Board shall exercise oversight on the following:

i. risk management system, policy and strategy followed by the bank;

ii. exposures to related entities of the bank;

iii. conformity with corporate governance standards viz. in composition of various committees, their role and functions, periodicity of the meetings and compliance with coverage and review functions etc.”

3(2) Paragraph 17 of Chapter IV and paragraphs 22, 24, 25, 26 and 27 of Chapter V shall be deleted.

3(3) Title of Chapter-V ‘Calendar of Reviews and Board Meeting Procedures’ stands amended to ‘Matters to be placed before the Board’.

3(4) After paragraph 27, the following new paragraphs shall be inserted in chapter V as under:

“27A. Notwithstanding anything contained in extant RBI circulars or directions, the requirement for matters to be placed before the Board shall be as under:

i. Policies that are required to be placed before the Board for approval and those in respect of which such approval can be delegated, shall be as specified in Appendix I. Review of polices which are specified to be approved by Board may be delegated to Board Committees, with the Board approving only material amendments thereto.

ii. Matters, other than policies, that are required to be placed before the Board for approval/review/information, shall be as specified in Appendix II A.

iii. Matters, other than policies, that may be delegated at the discretion of the Board, shall be as specified in Appendix II B.

27B. In addition to above, the matters to be placed before the Board may be determined based on the following key principles:

i. The Board has ultimate responsibility for the bank’s business strategy and financial soundness, key personnel decisions, internal organisation and governance structure and practices, and risk management and compliance obligations. It may, however, delegate certain matters to the Board Committees / Management Committees, along with reporting requirements as may be necessary.

ii. The Board shall clearly articulate the matters reserved for its approval or to be brought to its notice for information or reporting. The role and responsibilities of the Board prescribed under various statutes or regulations, shall be taken into account in determining such matters. However, the Board shall ensure that sufficient time is dedicated to strategy and risk governance.

iii. The Chairperson of the Board shall have the primary responsibility for setting the agenda of the meeting.

iv. The Board shall ensure that it receives sufficient information from the management to discharge its role effectively. It shall clearly specify the nature and frequency of information required from the management. The Board may seek external reports, if needed.

v. The Board shall periodically review the matters to be placed before it as well as the matters delegated to the Board Committees / Management Committees. The review shall also include the timeliness of circulation of agenda items, adequacy of information captured in the agenda, time allotted for important matters, etc.”

4. These Amendment Directions shall come into force from October 01, 2026. Accordingly, the Directions / Circulars as specified in the appendices shall stand modified to the extent indicated therein with effect from October 01, 2026.

(Scenta Joy)
Chief General Manager

Appendix I

Polices to be placed before the Board for approval1

S.
No.
Broader
Policy
Head
Aspects to be
covered
Reference instruction(s) for
Commercial Banks
Can be
delegated
(Yes2/No)
1. Credit
Policy
Credit Facilities Paragraph 5 of Reserve Bank of India (Local Area Banks – Credit Facilities) Directions, 2025 Paragraph 7A (1), (2) and (3) Reserve No

Yes, in respect of 7A (3) only

Bank of India (Local Area Banks – Resolution of Stressed Assets)
Second Amendment Directions, 2026
Transfer and

acquisition of

loan exposures

Paragraph 13 and 29 of Reserve Bank No
of India (Local Area Banks – Transfer and Distribution of Credit Risk) Directions, 2025
Resolution of stressed assets Paragraph 6, 7 and 32 of Reserve No
Bank of India (Local Area Banks – Resolution of Stressed Assets)
Directions, 2025
Aspects  related to wilful defaulters and large defaulters Paragraph 4 of Reserve Bank of India (Local Area Banks – Treatment of Wilful Defaulters and Large
Defaulters) Directions, 2025
No
Income recognition, asset classification and provisioning norms3 Paragraph 8 and 87 of the Reserve No
Bank of India (Local Area Banks Income Recognition, Asset Classification and Provisioning pertaining to Advances) Directions, 2025
2. Investment Policy Investments and related activities Paragraph 6, 8, 10 and 17 of Reserve No
Bank of India (Local Area Banks – Classification, Valuation, and Operation of Investment Portfolio) Directions, 2025
3.

 

Risk Management Policy of the bank Credit Risk Management Paragraph 5 of Reserve Bank of India (Local Area Banks – Credit Risk
Management) Directions, 2025
No
Concentration Risk Management4 Paragraph 6 of Reserve Bank of India (Local Area Banks – Concentration Risk Management) Directions 2025 No
Market Risk management Paragraphs 18 and 20 of Guidance No
Note on Market Risk Management dated November 28, 2025
Operational
Risk
Paragraph 25, 26, 27, 31, 64, 74, 77, No

Yes, to any
Committee of
the Board#

97 & Principle 3, 4 and 5, of Guidance
Note on Operational Risk Management and Operational
Resilience dated November 28, 2025.Paragraph 7(3) and 7(4) of Reserve
Bank of India (Local Area Banks – Miscellaneous) Directions, 2025
Liquidity Risk / ALM Management Paragraph 6, 7, 9, 10, 11, 12, 13 and Yes, in respect
of paragraph
10,13, to Asset
Liability
Management
Committee;
in respect of
paragraph11,12, to
Management
Committee.
14 of Reserve Bank of India (Local
Area Banks – Asset Liability

Management) Directions, 2025

Cyber Security Paragraph 3 of Cyber Security

Framework in Banks dated June 2, 2016

No
Fraud Risk

Management –

Roles and
responsibilities

of Board /
Board Committees & Senior Management

Paragraph 2.1.1 of annex to Master No
Directions on Fraud Risk Management in Commercial Banks (including Regional Rural Banks) and All India Financial Institutions dated July 15, 2024
4. Outsourcin g Policy Paragraph 9, 10 of Reserve Bank of Yes, in respect of paragraph 10(iv) only, to any Committee of the Board
India (Local Area Banks – Managing Risks in Outsourcing) Directions, 2025
5. IT Policy IT, InformationAssets, Information Security, Business Continuity, Cyber Security Paragraph 5(a) of Master Direction on No
Information Technology Governance,Risk, Controls and Assurance
Practices dated November 7, 2023
6. Policy on

Digital Banking

Prepaid Payment Instruments (PPIs) and itsrelated

activities

Paragraph 7.2, 7.9 (a), 7.11(a) and No
15.2 of Master Directions on Prepaid
Payment Instruments (PPIs) dated

August 27, 2021

7. Responsibl e Business

/ Lending
conduct including customer service

Business conduct Paragraph 5 of Reserve Bank of India (Local Area Banks – Responsible Business Conduct) Directions, 2025. Yes, to any
Committee to
which powershave been
delegated bythe Board
Issuance of

debit cards

Paragraph 7 of Reserve Bank of India (Local Area Banks – Debit Cards:Issuance and Conduct) Directions,
2025
Yes, to any
Committee to
which powers have been
delegated by
the Board#
CreditInformation Reporting Paragraph 37 of Reserve Bank of No
India (Local Area Banks – CreditInformation Reporting) Directions,
2025
Acceptance of Form A2 in ‘online’ mode for outward remittance Paragraph 3 of circular on Online submission of Form A2: Removal of limits on amount of remittance – A.P. (DIR Series) Circular No. 12 datedJuly 03, 2024 read with MD on
Liberalised Remittance Scheme datedJanuary 01, 2016, MD on Other
Remittance Facilities dated January 01, 2016 and MD on Remittance of Assets dated January 01, 2016.
Yes, to any
Committee to
which powershave been
delegated by
the Board#
8. Authorizati

on for
Banking

outlets /
other banking channels and engaging

Opening, merging, shifting, conversion and

closure of
banking outlets

/ offices /
mobile banking facilities

Paragraph 6 (i), (ii), (iii), and (v) of Yes, to any
Committee to
which powershave been
delegated by
the Board#
Reserve Bank of India (Local AreaBanks – Branch Authorisation)
Directions, 2025
with

business agents

Engaging with Business Correspondent s Paragraph 6(iv) of Reserve Bank of No
India (Local Area Banks – Branch Authorisation) Directions, 2025
Engaging with Forex Correspondent s Regulation 12 of Chapter VI of Foreign No
Exchange Management (Authorised Persons) Regulations, 2026
9. Policy onDeposits / other Liability products GoldMonetization scheme Paragraph 1.2(iii) and 2.1.1(v) of Gold Yes, to any
Committee to
which powershave been
delegated by
the Board#
Monetization Scheme, October 22, 2015
10. Policy on

appointme

nt &
remunerati

on of
auditors

Appointment /

engagement of Auditors

Paragraph 10.1 of Guidelines for Yes, to Audit
Committee of
the Board#No
Appointment of SCAs / SAs of Commercial Banks dated April 27, 2021 Paragraph 4.1 and 4.1.1 of Annex to
Master Directions on Fraud RiskManagement in Commercial Banks (including Regional Rural Banks) and

All India Financial Institutions dated
July 15, 2024

11. Policy / criteria on Fit & Proper (F&P) assessment of Major Shareholders F&P assessment of major shareholder Paragraph 6 of Reserve Bank of India (Local Area Banks – Acquisition and Holding of Shares or Voting Rights) Directions, 2025 No
12. Policy on Compensat ion Compensation of Directors/
Chief Executive Officers/ Material Risk
Takers
Paragraph 26(1) and (2) of Reserve No
Bank of India (Local Area Banks – Governance) Directions, 2025
Criteria for granting fixed

remuneration to its NEDs

Paragraph 24(ii) of Reserve Bank of No
India (Local Area Banks – Governance) Directions, 2025
13. CSR Policy (donations etc) Paragraph 7(2) and 48 of Reserve No
Bank of India (Local Area Banks – Miscellaneous) Directions, 2025
14.

 

Complianc e Policy

 

Paragraph 2.1 of Compliance No

 

functions in banks and Role of Chief Compliance Officer (CCO) dated September 11, 2020
15. Policy on Protected Disclosure Scheme Paragraph 4 of Annex to Protected No
Disclosures Scheme for Private Sector and Foreign Banks dated April 18, 2007
16. Code of conduct/Ethics
policy
Paragraph 16 of Guidance Note on No
Operational Risk Management and Operational Resilience dated
November 28, 2025
17. Policy on Know Your Customer (KYC) Paragraph 5(1), 5(2), Yes, in all
aspects except
paragraph
5(3)(v)(a), to
any Committee
to which
powers have
been
delegated by
the Board
5(3)(i),(ii),(iii),(iv),(v)(a),(v)(b), 9 and
10, of Reserve Bank of India (Local
Area Banks – Know Your Customer) Directions, 2025
18. Policy on Interest rate on Deposits/ Advances Paragraph 6(1)(i), (ii), (iii), (iv) of Yes, to any
Committee of
the BoardYes in respect
of paragraph
5(1) only, toany Committee of the Board
Reserve Bank of India (Local Area Banks – Interest Rate on Deposits) 1Directions, 2025 Paragraph 5(1) and 27 of Reserve
Bank of India (Local Area Banks – Interest Rates on Advances)
Directions, 2025

Appendix II – Matters other than policies5

IIA – To be placed before the Board for approval / review / information

S.No Subject matter Paragraph reference in extant directions/circulars
For Approval
1. Acquisition of Shares or Voting Rights Paragraph 23 & 24 of Reserve Bank of India (Local Area
Banks – Acquisition and Holding of Shares or Voting Rights) Directions, 2025
2. Issuance of RegulatoryCapital (PDI / RNCPS / RCPS / Basel III Tier 2 Debt Capital / Upper Tier 2 instruments and Lower Tier 2 instruments) Paragraph 9(2), 10(1), 13(2), 14(3), and 15(1) Reserve Bank
of India (Local Area Banks – Prudential Norms on Capital Adequacy) Directions, 2025
3. Reclassifications between

categories viz. Held till
Maturity (HTM), Available for Sale (AFS) and Fair Value through Profit and Loss (FVTPL)

Paragraph 65 of Reserve Bank of India (Local Area Banks –
Classification, Valuation and Operation of Investment Portfolio) Directions, 2025
4. Declaration of Dividend Paragraph 6 of Reserve Bank of India (Local Area Banks – Prudential Norms on Declaration of Dividends) Directions, 2025
5. Approval by Board of Directors in case of Voluntary Amalgamation Paragraph 7 and 9 of Reserve Bank of India (Local Area Banks – Voluntary Amalgamation) Directions, 2025
6. RTGS membership Annex V of the Master Direction on Access Criteria for
Payment Systems dated January 17, 2017
7. Appointment / Reappointment of Managing Director & CEO / PTC Paragraph 28 (ii) of Reserve Bank of India (Local Area Banks
– Governance) Directions, 2025
8. Remuneration of WTD Paragraph 29 of Reserve Bank of India (Local Area Banks –
Governance) Directions, 2025
9. Appointment of the Chief Compliance Officer (CCO) Paragraph 2.5 of Compliance functions in banks and Role of
Chief Compliance Officer (CCO) dated September 11, 2020
For Review
10. Business through brokers in excess of 5% limit Paragraph 91(8) of Reserve Bank of India (Local Area Banks
– Classification, Valuation and Operation of Investment Portfolio) Directions, 2025
11. Compromise Settlements and Technical Write-offs Paragraph 23 of the Reserve Bank of India (Local Area Banks
– Resolution of Stressed Assets) Directions, 2025
12. Customer Service aspects Paragraph 18 of Reserve Bank of India (Local Area Banks-
Credit Information Reporting) Directions, 2025
13. Reporting of annual review of donations made by the bank Paragraph 49 of Reserve Bank of India (Local Area Banks –
Miscellaneous) Directions, 2025
14. Fit and proper status of major shareholders Paragraph 18(4), 19, 20 and 21 of Reserve Bank of India
(Local Area Banks – Acquisition and Holding of Shares or Voting Rights) Directions, 2025
15. Information Security Governance of Payment Aggregators and Payment Gateways Paragraph 1.1 of Annexure 1 to Master Direction on
Regulation of Payment Aggregator (PA) dated September 15, 2025
16. Operational resilience of business units Paragraph 55 of Guidance Note on Operational Risk
Management and Operational Resilience dated November 28, 2025.
17. Loans to Related Parties Paragraph 16N of the Reserve Bank of India (Local Area
Banks – Credit Risk Management) Directions, 2025
18. Acquisition of Shares or Voting Rights – Monitoring mechanism to ascertain that a major shareholder has obtained prior RBI approval for acquiringshareholding rights Paragraph 25 of Reserve Bank of India (Local Area Banks –
Acquisition and Holding of Shares or Voting Rights  Directions, 2025
19. Report on encumbrance of shares – ongoingmonitoring of section 12B (5) of BR Act, 1949 Paragraph 28 of Reserve Bank of India (Local Area Banks –
Acquisition and Holding of Shares or Voting Rights) Directions, 2025

IIB – May be delegated at the discretion of the Board

S.No Subject matter Paragraph reference in extant
directions/circulars
May be delegated to
For Approval
1. Risk assessment methodology for RBIA Paragraph 4.1 of guidance note onRisk-Based Internal Audit dated

December 27, 2002

Audit Committee of the Board#
2. Annual Audit Plan Paragraph 5.1 of guidance note on Risk-Based Internal Audit dated

December 27, 2002

Audit Committee of the Board#
3. Sanction of loans to Directors / Directors of other banks and their relatives Paragraph 16K of Reserve Bank of India

(Local Area Banks – Credit Risk Management) Directions, 2025

Committee on Lending
to Related Parties
4. Operational manual highlighting the

roles/responsibilities of the dealers/mid- office/back-office

Paragraph IV (xiv) of Constituents’ Subsidiary General Ledger Account

(CSGL) guidelines dated September 22, 2021

Any Committee to
which powers have been delegated by the Board#
5. Allotment of Special Assignments other than Statutory Audit Paragraph 6.4 of the Guidelines for

Appointment of Statutory Central

Auditors (SCAs)/Statutory Auditors
(SAs) of Commercial Banks (excluding RRBs), UCBs and NBFCs (including HFCs) dated April 27, 2021

Audit Committee of the Board
6. Annual Banking  Outlet Expansion Plan (ABOEP) Paragraph 18 of Reserve Bank of India (Local Area Banks – Branch Authorisation) Directions, 2025 Any Committee to
which powers have
been delegated by the
Board#
7. Establishing new correspondent banking relationships Paragraph 72 of Reserve Bank of India Any Committee to
which powers have been delegated by the
Board#
(Local Area Banks – Know Your  Customer) Directions, 2025
8. Authorisation and oversight of service providers, owned or  ontrolled by Directors or key

managerial personnel

Paragraph 12 (vi) of Reserve Bank of

India (Local Area Banks – Managing Risks in Outsourcing) Directions, 2025

Any Committee of the
Board
9. Compromise

 

settlements in
respect of debtors classified as fraud or wilful defaulter (excluding cases originally sanctioned by the Management

Committee of the
Board)

Paragraph 7(5)(ii) of the Reserve Bank

of India (Local Area Banks – Resolution of Stressed Assets) Directions, 2025

Management
Committee of the
Board#
10. Long Form Audit Report (LFAR) to be submitted to the
Reserve Bank
Paragraph 5(c) of Long Form Audit Report (LFAR) – Review dated  September 5, 2020 Audit Committee of the Board#
11. Progress in Implementation of Cassette – Swaps in ATMs Paragraph 3 of Cassette – Swaps in ATMs, dated March 31, 2022 Any Committee to
which powers have been delegated by the
Board#
12. Investment Portfolio Paragraphs 89(12)(i), 89(12)(ii) and 92

(1) of Reserve Bank of India (Local Area

Risk Management
Committee of the
Board#
Banks – Classification, Valuation and Operation of Investment Portfolio)
Directions, 2025
13. Business

 

Correspondent (BC) Model

Paragraph 7(2)(iii), (iv) and 51 of Reserve Bank of India (Local Area  Banks – Branch Authorisation)
Directions, 2025
Any Committee to
which powers have
been delegated by the
Board#
14. Review and

 

Monitoring of

Transactions in

Banking Outlets

Paragraph 7(1)(ii),(iii) and (iv) of Reserve Bank of India (Local Area Banks – Branch Authorisation)
Directions, 2025
Any Committee to
which powers have
been delegated by the
Board#
15. Review of scheme on doorstep banking

 

services and its
progress

Paragraph 7(3)(i) of Reserve Bank of

India (Local Area Banks – Branch Authorisation) Directions, 2025 Paragraph 26 of Reserve Bank of India (Local Area Banks – Responsible Business Conduct) Directions, 2025.

Any Committee to
which powers have been delegated by the
Board#Customer Service  Committee of the
Board#
16. Review, reporting

 

and compliance

certificate in relation

to all material
outsourcing

Paragraph 11, 16(iii) of Reserve Bank of Any Committee to
which powers have
been delegated by the
Board#
India (Local Area Banks – Managing Risks in Outsourcing) Directions, 2025
17. Effectiveness of  Risk-Based Internal Audit Paragraph 8.2 of Guidance notes on Risk-Based Internal Audit dated
December 27, 2002
Audit Committee of the Board
18. Review of Cyber Security Risks / Reporting of significant cyber security incidents Paragraph 24.d.vii of the Reserve Bank of India (Information Technology Governance, Risk, Controls and
Assurance Practices) Directions, dated November 07, 2023Paragraph 5 of the Sustained Assurance on Cyber Resilience
Framework dated November 1, 2017
Risk Management
Committee / IT sub-
committee of the
Board
19. Base rate Paragraph 13 of Reserve Bank of India (Local Area Banks – Interest Rates on Advances) Directions, 2025 Asset Liability
Committees
20. Marginal cost of funds Paragraph 23 of Reserve Bank of India (Local Area Banks – Interest Rates on Advances) Directions, 2025 Any Committee to
which powers have
been delegated by the
Board
21. Review of NPAs above a threshold
amount
Paragraph 30 (2) of the Reserve Bank Any Committee to
which powers have
been delegated by the
Board
of India (Local Area Banks – Transfer and Distribution of Credit Risk)
Directions, 2025
22. Customer Service aspects Paragraph 6 of Reserve Bank of India (Local Area Banks – Responsible Business Conduct) Directions, 2025 Any Committee to
which powers have
been delegated by the
Board
23. Report by CIV on Vigilance Activities Paragraph 3 of Annex Internal Vigilance in Private Sector/foreign Banks dated May 26, 2011 Any Committee of the Board#
24. Analysis of incidents of operational risk failures & their
impact
Paragraph 102 of Guidance Note on Operational Risk Management and Operational Resilience dated November 28, 2025 Any Committee of the
Board#
25. Results of review of Business Continuity  Planning and its
Testing
Paragraph 77 (1) and 82 of Guidance Note on Operational Risk Management and Operational Resilience dated November 28, 2025 Any Committee to
which powers have been delegated by the Board#
26. Assessments of the

 

Operational Risk
Management

Framework by

internal or external

audit / risk
management function

Paragraph 12 (3) (ii) (c), (d) and 52 of Guidance Note on Operational Risk Management and Operational
Resilience dated November 28, 2025
Audit Committee of the Board#
27. Report on Compliance risks Paragraph 2.9(iv), 2.9(v) and 2.9(vi) of Audit Committee of the Board#
the Compliance functions in banks and Role of Chief Compliance Officer (CCO) dated September 11, 2020
28. Review of Fraud risk incidents Paragraph 2.1.4 of the Master Directions on Fraud Risk Management in Commercial Banks (including Regional Rural Banks) and All India Financial Institutions dated July 15, 2024 Audit Committee of the Board

Notes:

1a. The matters enlisted here may be read along with the respective RBI Directions. Multiple requirements to place matters before Board, relating to a similar aspect / matter have been listed only once.

b. Banks are free to regroup the policies as they deem fit, so long as the aspects above are captured in one or more policies.

2 Yes may be read as “yes, at the discretion of the Board.”

3 Related aspects may be covered in Investment policy as well

The directions/circulars shall stand modified w.e.f. October 1, 2026 in accordance with the stance indicated herein

4 Related aspects may be captured in market risk policy

5 The matters enlisted here may be read along with the respective RBI Directions. Multiple requirements to place matters before Board, relating to a similar aspect / matter have been listed only once.

The directions/circulars shall stand modified w.e.f. October 1, 2026 in accordance with the stance indicated herein

Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Post by Date
July 2026
M T W T F S S
 12345
6789101112
13141516171819
20212223242526
2728293031