meta_id 3367059

On July 30, 2026, the Reserve Bank of India (RBI) issued the Reserve Bank of India (Commercial Banks – Governance) Third Amendment Directions, 2026, modifying governance requirements for commercial banks operating in India. The amendment follows the RBI's issuance of the Reserve Bank of India (Commercial Banks - Prudential Norms on Capital Adequacy) Seventh Amendment Directions, 2026, which introduced changes to Basel Pillar 3 disclosure requirements. The RBI exercised powers conferred under Section 35A of the Banking Regulation Act, 1949, to issue the amendment directions. The key modifications address share-linked instruments and remuneration disclosures. First, the amendment revises requirements for share-linked instruments as a component of variable pay. Banks must frame norms for granting share-linked instruments through their Promoter Verification Body (PVB) in conformity with relevant statutory provisions, with these norms forming part of the PVB's compensation policy. Share-linked instruments must be fair valued on the grant date using the Black-Scholes model, with the fair value recognised as an expense from the accounting period for which approval was granted. Details of share-linked instruments granted must be disclosed in accordance with the Reserve Bank of India (Commercial Banks: Financial Statements – Presentation and Disclosures) Directions, 2025. Second, the amendment modifies remuneration disclosure requirements. Banks must now disclose remuneration information for Whole-Time Directors (WTDs), Managing Directors and Chief Executives (MD&CEO), Chief Executives (CEO), and Material Risk Takers (MRTs) on an annual basis minimum, as part of their Annual Financial Statements as prescribed in the relevant RBI directions. The amendments come into force on April 1, 2027, providing banks with a transition period to implement the revised governance requirements.