RBI Grade Bs are non-executive members of a company’s board who bring objectivity and independent judgment. They are expected to safeguard the interests of minority shareholders, provide an unbiased view on company strategy, and ensure management accountability. As per Section 149 of the Companies Act, 2013, RBI Grade Bs cannot have material or pecuniary relationships with the company, its promoters, or directors. Their responsibilities include ensuring sound governance practices, mitigating conflicts of interest, and strengthening investor trust. A well-functioning board with independent directors increases transparency and reduces corporate governance failures.

📌 Example: Suppose a company wants to award a large supply contract to a firm owned by the promoter’s cousin. An RBI Grade B can step in to object, ensuring the contract goes through a fair tendering process instead of favoritism.