RBI Announces Major Governance And Ombudsman Reforms

The Reserve Bank of India (RBI) has implemented a series of major structural changes across the financial sector, effective July and October 2026. These updates include an expanded Integrated Ombudsman Scheme, allowing customers to claim up to ₹33 lakh for service deficiencies, and a major overhaul of board governance frameworks for banks. The new governance rules mandate a shift toward strategic oversight rather than routine compliance, extending provisions previously reserved for public sector banks to the private sector.

To strengthen institutional health, the RBI issued final norms prohibiting the sale of Specified Non-financial Assets (SNFAs) back to defaulting borrowers. Regulated entities must now dispose of these assets within seven years, exclusively through arm's-length public auctions. Simultaneously, a proposed Data Governance Framework requires financial institutions to establish a 'Single Source of Truth' (SSOT) for data, ensuring compliance with the Digital Personal Data Protection Act of 2023.

Complementing these policy shifts, the RBI approved the appointment of former Chief Election Commissioner Rajiv Kumar as the part-time chairman of HDFC Bank. His three-year tenure, beginning July 15, 2026, aims to guide the bank's leadership transition, including the upcoming reappointment of the MD and CEO. These changes collectively aim to professionalize bank boards, protect customer interests through enhanced grievance mechanisms, and modernize data and asset management protocols across India's financial system.