There is an old governance adage: “The role of a board is not to run the business, but to ensure that the business is well-run”. Yet, over the past decade, many boardrooms have shifted away from that principle. Agendas have grown crowded, board papers have swelled into hundreds of pages, and directors have often spent disproportionate time reviewing policies, noting operational updates and approving routine matters, leaving little room for discussions that could shape an institution’s future.
Against this backdrop, the Reserve Bank of India’s (RBI) Governance Amendment Directions, 2026—issued on 14 July 2026 for commercial, small finance, payments, and local area banks, and effective 1 October 2026—offer a timely and welcome reset.
The amendments replace the earlier prescriptive approach, including seven broad themes, mandatory reviews of Action Taken Reports (ATRs), placement of important regulatory communications, and other procedural requirements that guided board agendas. This is done with two consolidated appendices setting out which policies and matters must go to the board, which can be delegated and to which committee. The RBI itself has described the change as architectural rather than substantive. The Governance Amendment Directions consolidate board-placement requirements previously dispersed across multiple master directions and circulars into a single reference framework.
But the architecture carries a philosophy. By assigning the chairperson primary responsibility for setting the agenda and requiring boards to periodically review matters reserved for the board and those delegated to committees, the RBI is reinforcing a mindset it has long advocated: a board’s greatest contribution is not the number of approvals it grants, but the quality of the judgment it exercises.
Consolidation with a purpose
Banking governance requirements have evolved over successive crises, governance failures, technology risks and rising regulatory expectations. While each addition had merit in isolation, collectively they resulted in boards spending disproportionate amounts of time on operational oversight and procedural compliance, and comparatively less on evaluating strategic risks and opportunities.
The Governance Amendment Directions respond to this problem by making governance requirements more navigable. The two new appendices replace what often required tracking board-replacement clauses across multiple master directions with a single framework, reducing administrative complexity without materially altering underlying obligations.
The more substantial change is that the RBI has accepted industry feedback to drop the requirement that boards individually define ‘material amendment’ for every policy, easing delegation of routine reviews to committees. It also restricted delegation explicitly to duly constituted boards or sub-committees, ruling out any transfer of core oversight to senior management while softening the earlier language that assigned the board “ultimate responsibility for the bank’s performance”. Taken together, these are the more genuine markers of a principles-based recalibration.
More time for what truly matters
The real opportunity in the new framework goes beyond a shorter agenda for its own sake. It is a chance to redirect board time towards issues that demand informed challenge and strategic oversight.
Today’s banking landscape is shaped by forces that barely featured in boardroom discussions a decade ago, such as artificial intelligence (AI), cyber resilience, digital ecosystems, geopolitical fragmentation, climate-related financial risks and rapidly changing business models. These are strategic board issues that demand difficult questions, time and perspective, which are squeezed when agendas are dominated by routine approvals and operational matters. The Governance Amendment Directions create an opportunity to rebalance that equation.
Delegation is not dilution
Greater clarity on delegation should not be interpreted as a dilution of board accountability. Strong governance has never meant that boards approve everything. It requires them to establish clear authority structures, define decision rights, empower committees and management appropriately, while reserving their own attention for matters that require independent judgement.
Risk oversight takes centre stage
One of the more important features of the new framework is the short ‘board oversight areas’ provision added for commercial, small finance and payments banks, covering the risk management system, exposures to related entities and conformity with corporate governance norms. This lands at a moment when the nature of risk itself is changing.
Financial risk is now deeply interconnected with technology, operations, reputation and geopolitics. Boards need to spend less time reviewing historical dashboards and more on challenging assumptions, evaluating emerging risks, understanding interdependencies and continually questioning whether the institution’s risk appetite remains appropriate.
The real work begins now
The publication of these directions is not the end of the exercise but just the beginning. Simply remapping agenda items onto the new appendices will not deliver better governance unless boards use this as a prompt to redesign how they operate. Boards should ask themselves: if we removed half the approvals from our agenda tomorrow, what strategic conversations would replace them?
Ahead of 1 October 2026, boards should prioritise four actions:
- First, map existing board and committee charters against the new Appendix I and Appendix II-A/B. Distinguish clearly between decisions that require board judgment and those that can be delegated, while updating committee charters and delegation resolutions.
- Second, redesign the annual board calendar and information packs. Deliberately create space for strategy, emerging risk, technology, cyber resilience, capital allocation, culture and succession planning.
- Third, strengthen the board’s approach to risk oversight by challenging assumptions, and testing resilience through scenarios. and reassess whether risk appetite remains aligned with strategy.
- Finally, evaluate board effectiveness based on quality of debate, challenge and judgement, not procedural compliance with the old checklist.
The RBI’s Governance Amendment Directions give boards a clearer map of what is theirs to decide and an impose an explicit expectation that they will use the space this creates wisely. Good governance has never been measured by the volume of papers approved or the length of board agendas.
The real test now is whether boards will use the space created by the new framework to exercise better judgement, deepen strategic oversight and strengthen institutional resilience. Those that do will move beyond compliance towards governance that is more effective and future-ready.
Deepti Berera is a partner at Deloitte South Asia.