With a view to give focused attention to matters of strategic and financial importance,Banks are advised by RBI to do away with comprehensive ‘Calendar of Reviews’ which Boards of banks use to deliberate. Instead banks were asked to replace it with critical themes recommended by Dr.P.J.Nayak committee to determine the Board agenda items and the periodicity thereof, with the approval of their Boards. This is with a view of providing adequate focus on matters of strategic and financial importance, including the seven broad themes indicated below. It is left to the banks’ Boards to determine other list of items to be deliberated and periodicity thereof.
The list of 7 critical themes recommended by Nayak Committee is as under.
Business Strategy: Development of new products; competitiveness of individual businesses; business reviews in relation to targets.
Risk: Policies concerning credit, operational, market, liquidity risks; assessing the independence of the risk function.
Financial Reports and their integrity: Detailed scrutiny of quarterly and annual financial results; NPA management and reported NPA and provisioning integrity.
Compliance: 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: Mis-selling, particularly third-party products; laying down the appropriateness of products to different customer segments; understanding the broad trends and concentration in the growth of customer grievances and their resolution.
Financial Inclusion: Review of priority sector lending; payments for the disadvantaged; deposit mobilization from weaker sections; support to microfinance institutions; and other issues.
Human Resources: Appointments and approvals of directors, perks and perquisites for employees, incentive schemes for employees, promotion policies for employees, training and skill development of employees.