The Boards should manage alignment of performance with pay as well as enforce accountability to ensure adherence to the best practices while achieving the objectives set for the bank by the Board. Governance and Conduct Prudential regulation and conduct regulation denote what is commonly known as twin peaks model for the regulations.
In RBI, we are looking at these two aspects through the prism of governance with equal emphasis on conduct of business through prudence. It's no doubt essential for the management to deliver good performance but more importantly this should be achieved by adhering to acceptable customer and market conduct and best corporate governance practices.