RBI Governor Shaktikanta Das advises Bank Boards to adopt fair practices for customer protection

RBI Governor Shaktikanta Das advises Bank Boards to adopt fair practices for customer protection

• Reserve Bank of India’s Governor Shaktikanta Das advised Bank Boards to adopt fair practices and customer protection including digital lending.
• RBI has come across gaps in governance of certain banks, with the potential to cause some degree of volatility in the banking sector. While these gaps have been mitigated, it is necessary that Boards and the management do not allow such gaps to creep in, he added.  He stated that it is the joint responsibility of the Chairman and all Directors to ensure robust governance in banks.
• Employees cannot be rewarded for increasing short-term profits without adequate recognition of the risks and long-term consequences. Compensation structure should promote long-term performance and be in line with the bank’s business and risk strategy, objectives, and values and incorporate measures to prevent conflicts of interest, he added.

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Published date : 30 May 2023 06:07PM