Friday 15 May 2015

RBI tells banks to deliberate on 7 themes in board deliberations

The business strategy theme includes development of new products; competitiveness of individual businesses; business reviews in relation to targets 

The Reserve Bank of India on Thursday directed bank boards to deliberate on seven critical themes including business strategy, risk, financial report and their integrity, customer protection, financial inclusion and human resources as prescribed by the PJ Nayak committee.

The business strategy theme includes development of new products; competitiveness of individual businesses; business reviews in relation to targets.

The theme of risk includes policies concerning credit, operational, market, liquidity risks; assessing the independence of the risk function.
The theme of Financial Reports and their integrity consists of detailed scrutiny of quarterly and annual financial results; NPA management and reported NPA and provisioning integrity.

Compliance comprises meeting the regulatory requirements; adherence to RBI and SEBI norms; observations from the annual financial inspection by RBI, and from the Long Form Audit Report; review of decisions in previous minutes of meetings, and key decisions within subsidiaries; review of action taken reports; appointments to board committees.

Customer protection consists of regulatory requirements; adherence to RBI and SEBI norms; observations from the annual financial inspection by RBI, and from the Long Form Audit Report; review of decisions in previous minutes of meetings, and key decisions within subsidiaries; review of action taken reports; appointments to board committees.

Financial inclusion will include Review of priority sector lending; payments for the disadvantaged; deposit mobilization from weaker sections; support to microfinance institutions; and other issues.

The human resources would include appointments and approvals of directors, perks and perquisites for employees, incentive schemes for employees, promotion policies for employees, training and skill development of employees. 

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