In this regard, it is noteworthy that recently, the functioning of bank boards in the private sector seems to have attracted significant adverse notice, both from market and supervisor. That the representation of RBI on the Boards is not desirable has been conceded just as RBI has expressed interest in divesting all its ownership functions.
The processes by which these changes have been and are being brought about may also be of some interest. First, RBI has taken initiative in bringing about changes rather than “keep aloof” from the regulated entities as pure theory may suggest.