An indicative list of dos and don’ts has also been formulated to serve as a guide to directors to enable them to play their role more effectively. The need for the directors to maintain “arms” length from the day-to-day operations of the bank is also highlighted in the dos and don'ts prescribed by Reserve Bank.
Connected lending to directors, their family members and associated business firms, in UCBs has been banned, except for loans against securities like fixed deposits etc. The Reserve Bank has also circulated a list of best practices followed by well-run banks for others to emulate.