Continuing compliance of ‘fit and proper’ criteria for shareholders and directors will have to be ensured by the bank on an ongoing basis subject to independent verification by RBI where felt necessary. How did we come to devise these guidelines? Apart from an internal review, we scanned international practice.
International approaches Internationally, the regulatory/supervisory approach has been evolving into cohesive and inclusive regulatory paradigm involving three different monitoring perspectives on the overall functioning of banks •  an enabling and proactive regulatory and supervisory oversight,  •  internal control through a vibrant and professional Board and  •  market discipline  All three in isolation have their limitations and are effective differentially based on the overall systemic contexts such as the level of maturity of the economy, and hence the markets, the efficacy of the legal system and the resolution mechanisms in place, the prevalent business culture etc.