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Rule · RBI · 30 Jul 2026

Reserve Bank of India (Commercial Banks – Governance) Third Amendment Directions, 2026

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The Reserve Bank of India substitutes Paragraph 63(3)(ii)(f) to require that share-linked instruments be included as variable pay, with grant norms framed by the Principal Board-level functionary (PVB) and fair value calculated using the Black-Scholes model. It also substitutes Paragraph 63(7) to mandate annual disclosure of remuneration for Whole Time Directors, Managing Director & CEO, CEO, and Managing Representatives in Annual Financial Statements. These amendments apply to commercial banks and come into force on April 1, 2027.

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( 239 kb ) Reserve Bank of India (Commercial Banks – Governance) Third Amendment Directions, 2026

RBI/DOR/2026-27/206 DOR.ACC.REC.No.183/29.67.001/2026-27

July 30, 2026

Reserve Bank of India (Commercial Banks – Governance) Third Amendment Directions, 2026

Please refer to the Reserve Bank of India (Commercial Banks – Governance) Directions, 2025 (hereinafter referred to as ‘the Directions’).

  1. On a review, consequent to the issuance of the Reserve Bank of India (Commercial Banks - Prudential Norms on Capital Adequacy) Seventh Amendment Directions, 2026 , pertaining to Basel Pillar 3 disclosures, and in exercise of the powers conferred by the section 35A of the Banking Regulation Act, 1949 and all other laws enabling the Reserve Bank of India (hereinafter called the Reserve Bank) in this regard, the Reserve Bank being satisfied that it is necessary and expedient in the public interest so to do, hereby issues the Amendment Directions hereinafter specified.

  2. These Directions shall be called the Reserve Bank of India (Commercial Banks – Governance) Third Amendment Directions, 2026.

  3. The Amendment Directions modify the Directions as under:

4(1) For Paragraph 63(3)(ii)(f), the following shall be substituted, namely:

“Share-linked Instruments: Such instruments shall be included as a component of variable pay. Norms for grant of share-linked instruments shall be framed by a PVB in conformity with relevant statutory provisions and should form part of the PVB’s compensation policy. The details of share-linked instruments granted shall also be disclosed in terms of the disclosure requirements stipulated in the Reserve Bank of India (Commercial Banks: Financial Statements – Presentation and Disclosures) Directions, 2025

Reserve Bank of India (Commercial Banks - Prudential Norms on Capital Adequacy) Directions, 2025 . Share-linked instruments shall be fair valued on the date of grant by the PVB using Black-Scholes model. The fair value thus arrived at shall be recognised as an expense beginning with the accounting period for which approval has been granted.”

4(2) For Paragraph 63(7), the following shall be substituted, namely:

“A PVB shall make disclosure on remuneration of WTDs / MD&CEO / CEO / MRTs on an annual basis at the minimum, as part of in their Annual Financial Statements as prescribed in Reserve Bank of India (Commercial Banks: Financial Statements – Presentation and Disclosures) Directions, 2025

Reserve Bank of India (Commercial Banks - Prudential Norms on Capital Adequacy) Directions, 2025 , as amended from time to time.”

  1. The above amendments shall come into force from April 1, 2027.

(Sunil T S Nair) Chief General Manager

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Reserve Bank of India (CommercialBanks – Governance) Directions, 2…Not in RegAlertReserve Bank of India (Commercial Banks – Governance) Directions, 2025 — Not in RegAlertReserve Bank of India(Commercial Banks – Governanc…2026-07-30 · this documentReserve Bank of India (Commercial Banks – Governance) Third Amendment Directions, 2026 (2026-07-30)
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  • Reserve Bank of India (Commercial Banks – Governance) Directions, 2025Not in RegAlert

    “Please refer to the Reserve Bank of India (Commercial Banks – Governance) Directions, 2025 (hereinafter referred to as ‘the Directions’).”

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