RBI pushes for stronger governance at public sector banks

The Reserve Bank of India on Monday exhorted public sector banks to strengthen their boards and increase focus on managing risk.

At a meeting with senior management of PSBs in the capital, RBI Governor Shaktikanta Das asked lenders to strengthen governance so that they are able to identify risks early. “The Governor also emphasised the need for banks to ensure continued financial and operational resilience,” sad a statement from the RBI. The theme of the meeting was ‘Governance in Banks - Driving Sustainable Growth and Stability’.

Bankers did not comment on deliberations during the day-long meeting.

The Governor acknowledged the role played by the banks in supporting the economy and maintaining resilience along with improved financial performance in the face of several adverse shocks in recent times. He exhorted the Directors of banks to further strengthen the governance and assurance functions (risk management, compliance and internal audit) so that the banks are able to identify and mitigate risks at an early stage, added the statement.

The conference included addresses by the Deputy Governors and technical sessions on governance and assurance functions, credit risk, operational risk, IT/cyber risk and data analytics. The meeting was addressed by Deputy Governors MK Jain and M Rajeshwar Rao, along with Executive Directors representing the RBI’s Department of Supervision and Department of Regulation, and other senior officials.