What is noteworthy about the RBI Governor, Shaktikanta Das’s twin interactions with bank directors in May is his glossing over of the responsibilities of the directors, including shareholder directors, in the very narrow sense. There is no call to maximize profits or return money to shareholders. Reading between the lines the Governor is suggesting that board members must view themselves as Public Interest Director (PID) and not as shareholder directors.

This is not surprising.

The role of a bank’s board has changed since the financial crisis. Today’s banks in India need to be robust to support what will soon be a US$5 trillion plus economy. And in line with this, a bank director’s judgements will need to prioritise the stability and growth of the financial system. With this the bank’s boards have stepped into a new world of public interest directors.

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