Siddartha S. Karnani Shares Insights with businessline on RBI’s Independent Assessment of CEO Reappointments

Siddartha S. Karnani, Partner, was recently featured in businessline, where he shared his legal insights on the Reserve Bank of India’s approach to evaluating CEO reappointments in the banking sector, particularly in the context of governance reviews and internal audits.

Commenting on the role of internal audits and independent reviews, Siddartha explained that while a review commissioned by a bank can serve as an important input in understanding the underlying facts, it is unlikely to be the sole factor influencing the RBI’s decision on the reappointment of a bank’s chief executive.

He noted that the RBI exercises its own independent supervisory and regulatory judgment, considering a wide range of factors including corporate governance standards, regulatory compliance history, risk management practices, and the ‘fit and proper’ criteria prescribed under the applicable regulatory framework. This holistic assessment, he observed, reflects the regulator’s broader mandate of safeguarding the stability and integrity of India’s banking system.

Siddartha further explained that although an investigation conducted by an RBI-appointed external agency may enhance public confidence in cases involving significant governance concerns, the existing legal framework does not require the regulator to appoint an external auditor in every instance. Instead, the RBI retains the discretion to determine the nature and extent of supervisory scrutiny appropriate to the facts of each case.

Highlighting what ultimately carries the greatest weight in the regulatory process, Siddartha observed that the credibility of the review including its independence, scope, methodology, and findings together with the RBI’s own supervisory assessment, is likely to be more significant than the identity of the entity that commissioned the audit.

His comments highlight the RBI’s independent regulatory role and the importance of strong governance, credible oversight mechanisms, and objective supervisory evaluation in maintaining confidence in India’s banking sector.

Read the full businessline article here: https://www.thehindubusinessline.com/money-and-banking/hdfc-bank-chief-reappointment-legal-review-bolsters-case-but-rbi-unlikely-to-be-swayed/article71157462.ece

Last Updated on 1 July, 2026