Reserve Bank of India (Local Area Banks – Governance) Amendment Directions, 2026

RBI/2026-27/180
DOR.HGG.GOV.153/29.67.001/2026-27

July 14, 2026

Reserve Bank of India (Local Area Banks – Governance) Amendment Directions, 2026

The Reserve Bank of India has amended the RBI (Local Area Banks – Governance) Directions, 2025 to rationalise the matters required to be placed before the Boards of Local Area Banks. The revised framework aims to reduce routine Board agenda items and allow greater focus on business strategy, financial soundness, risk governance, compliance and other key oversight responsibilities.

Under the Amendment Directions, certain existing provisions have been deleted, and Chapter V has been renamed “Matters to be placed before the Board.” New provisions classify policies and other matters that must be submitted to the Board for approval, review or information, as well as matters that may be delegated to Board Committees or Management Committees. Reviews of Board-approved policies may be delegated to Board Committees, while material amendments must continue to receive Board approval.

The Board will retain ultimate responsibility for the bank’s strategy, financial stability, senior personnel decisions, organisational and governance arrangements, risk management and regulatory compliance. It must clearly identify matters reserved for its approval or information, ensure adequate management reporting, periodically review delegated responsibilities and devote sufficient time to strategy and risk governance.

The Chairperson will have primary responsibility for setting the meeting agenda. The Board must also assess the timely circulation and adequacy of agenda papers, the information provided by management and the time allocated to important matters.

The Amendment Directions will come into effect on October 1, 2026, and the directions and circulars specified in the relevant appendices will stand modified accordingly. CA Sansaar

(Scenta Joy)
Chief General Manager

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