RBI has released a discussion paper today i.e. 12th June 2020, on ‘Governance in Commercial Banks in India’ for public comments To align the current regulatory framework with global best practices while being mindful of the context of domestic financial system.
Major Key Highlights – From Company Secretary (CS) Prospective:
1. Appointment of Company Secretary for Banks:
2. Performance assessment and Roles of the company secretary
3. The role of the head of compliance function is:
specific to the role expected of the bank being an RBI regulated entity while the role of the company secretary is to be defined by the fact that a bank is also a company or body corporate.
4. Responsibility of the company secretary:
5. Secretarial Audit Applicability:
6. Compensation of the functionaries in the Company Secretariat
Relevant RBI Press Release is as follows:-
RESERVE BANK OF INDIA
Date : Jun 11, 2020
RBI releases Discussion Paper on ‘Governance in Commercial Banks in India’
The Reserve Bank of India today released on its website a Discussion Paper on ‘Governance in Commercial Banks in India’ for public comments.
2. The objective of the discussion paper is to align the current regulatory framework with global best practices while being mindful of the context of domestic financial system. Accordingly, some of the major highlights of the paper are as follows:
i. Empower the Board of Directors to
a. set the culture and values of the organisation;
b. recognise and manage conflicts of interest;
c. set the appetite for risk and manage risks within the appetite;
d. improve the supervisory oversight of senior management;
ii. Empower the assurance functions through various interventions;
iii. Achieve clear division of responsibilities between the Board and the management; and
iv. Encourage the separation of ownership from management.
3. Improving the quality of governance in financial intermediaries is an important determinant of efficiency in allocation of resources, protection of depositors’ interest and maintaining financial stability. In this endeavour, the paper has been drafted to encourage stakeholder feedback.
4. Suggestions and comments on the discussion paper may be sent by email latest by July 15, 2020.
Chief General Manager
Press Release: 2019-2020/2485