NEW DELHI: The Reserve Bank of India (RBI) is asking the private sector banks, to ensure full participation of its members in the board meeting and committee meetings of the board. According to sources, review of board and committee meeting proceedings was one of the critical aspects the recently concluded annual inspection of banks for FY23.
“This year there was equal focus on financials aspects and the intangible factors such as corporate governance. As part of reviewing the strength of governance, the inspection looked into proceedings of board meetings and select committee meetings of the boards,” said a top executive of a private bank who didn’t want to be named.
An important aspect which was repeatedly highlighted by the regulator was the inadequate participation of board members during the meetings. “Invariably, there is just one or two active members during these proceedings, including the CEO and the rest seem to be quite passive or mute spectators. This was particularly noticed in case of independent directors,” said a person familiar with the matter.